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TMI Blog1988 (3) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... l was right in holding that there was no remission of the liabilities during this year and in deleting the addition of Rs. 33,767 sustained on this account by the Appellate Assistant Commissioner? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the interest paid by the assessee on arrears of cane cess and cane purchase tax was admissible deduction ? " First we take-up question No. (i). The brief facts are that the assessee transferred liabilities aggregating to Rs. 1,16,766,63 from the accounts under different heads to the general reserve account which are as follows Rs. 1. Transfer from Employees Provident Fund Equalisation 16,704.20 Fund 2. Transfer from I. K. Sugar Mills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late Tribunal, the assessee reiterated the stand taken before the lower authorities that there was no remission of the liabilities in respect of which addition was sustained by the Appellate Assistant Commissioner. It was urged that instead of keeping a separate account for each liability, the assessee had kept all these liabilities under one head. The Tribunal found that " these liabilities had not been written off by transfer to the profit and loss account ", but they have been transferred from their respective accounts to the general reserve account. After considering the rival submissions of the parties, the Tribunal held that the assessee had only kept these liabilities under one head and that there was no remission of liabilities in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit. For the above reasons, we uphold the view taken by the Appellate Tribunal that there was no remission of the liabilities in respect of which the addition was sustained by the Appellate Assistant Commissioner and hence the addition has to be deleted. Then we take up question No. (ii). It can be divided into two parts. The first part is whether the Appellate Tribunal was right in holding that the interest paid by the assessee on arrears of cane cess was deductible. This question is no more res integra and is fully covered by Mahalakshmi Sugar Mills Company v. CIT [1980] 123 ITR 429, in which the Supreme Court held that the interest paid on arrears of cane cess under section 3(3) of the U.P. Sugarcane Cess Act, 1956, is an allowable de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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