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TMI Blog1990 (10) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that the interest payable on the outstanding amount of cane purchase tax was allowable expenditure in computing the total income of the assessee-company in respect of the assessment years 1971-72 and 1972-73 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was in law justified in holding that the assessee was entitled to development rebate at a higher rate of 35% as against 20% allowed to the assessee in respect of the assessment year 1971-72 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in deleting the Appellate Assistant Commissioner's direction to the Income-tax Officer to reconsider the allowability of Rs. 4,76,966 paid for bonus and allowed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal was correct in law in holding that the interest of Rs.15,360 paid by the assessee company to the Income-tax Department for late payment of income-tax was not an allowable deduction under the Income-tax Act, 1961, in respect of the assessment year 1971-72 ?" We shall proceed to deal with them in their proper order. Question No. 1 pertains to the deductibility of interest paid by the assessee on the arrears of cane purchase tax. It has now been held by the Supreme Court in Mahalakshmi Sugar Mills Co. v. CIT [1980] 123 ITR 429 that the interest paid by the assessee under the provisions of the U.P. Sugar Cane Cess Act, 1956, constitutes part and parcel of the debt and, therefore, constitutes an admissible deduction. In Triveni Enginee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int". Following the decision of the Supreme Court referred to above, we must hold that strawboard is a priority industry and was, therefore, entitled to the benefit of section. 80-I. Questions Nos. 2 and 7 are, accordingly, answered in the affirmative, i.e., in favour of the assessee and against the Revenue. Questions Nos. 3 and 4 go together. They pertain to the deductibility of the bonus amount. After the enactment and coming into force of the Payment of Bonus Act, which created a statutory liability to pay bonus to the employees, the assessee has been claiming both the amounts actually paid as well as the amount which it was liable to pay as a permissible expenditure. The Income-tax Officer was, however, allowing only the amount actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative, i.e., in favour of the, assessee and against the Revenue. Question No. 5 relates to the difference amount which the assessee was allowed to collect under the interim order of this court subject to the condition that such amount is put in an account in the name of the District Magistrate which it was not entitled to operate. What happened was that, by a notification dated January 8, 1971, the Government of India fixed the price of levy sugar at Rs. 125.34 per quintal. The assessee, however, claimed that it should be at a higher figure. This court allowed it to collect the price from the purchasers at the rate of Rs. 147.53 per quintal, but the difference amount was to be put in the account aforesaid. Actually, the writ petition file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e agree with the Tribunal subject to the direction that if, in the subsequent years, it got the said amount by way of refund, it may be added to its income under section 41(1) of the Income-tax Act. We agree with the Tribunal and, accordingly, answer this question in the affirmative, i.e., in favour of the assessee and against the Revenue. So far as question No. 8 is concerned, we answer the same in the affirmative, i.e , against the assessee and in favour of the Revenue following the decision of the Punjab and Haryana High Court in CIT v. Oriental Carpet Manufacturers (India) P. Ltd. [1973] 90 ITR 373. We have not been persuaded to take a contrary view. We answer all the eight questions referred to this Court accordingly. No costs. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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