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TMI Blog1984 (11) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... for 1977-78 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in directing that liability to excise duty in sum of Rs. 44,312 should be allowed in computing the income for 1977-78 ? " The facts of the case, as per the statement of the case received, may be stated, in brief, thus : The assessee, M/s. Ratlam Straw Board Private Ltd., is a private limited company, deriving income from the manufacture and sale of strawboards. It had business contracts with the Director General of Supplies and Disposals for supplies within the stipulated time. The assessee failed to supply the agreed quantity of strawboard and, accordingly, the Directorate concerned demanded damages of Rs. 4,91,653. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as, therefore, deductible for 1977-78. He submitted that the assessee has been maintaining accounts on the mercantile system and, consequently, in view of the Supreme Court decisions in CIT v. Gajapathy Naidu [1964] 53 ITR 114 and CIT v. Swadeshi Cotton and Flour Mills Pvt. Ltd. [1964] 53 ITR 134 as also the decision in Trikamlal v. CIT [1982] 134 ITR 450 (MP), the answer to question No. 1 has to be decided in favour of the Revenue. The learned counsel for the respondent-assessee in fairness submitted that in view of these decisions, question No. 1 has to be answered in favour of the Revenue. The second question relates to the liability to excise duty in the sum of Rs. 44,312. The Commissioner of Income-tax (Appeals) found that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case law cited, we are of the opinion that this question has to be answered in favour of the assessee and against the Revenue as the learned counsel for the Revenue was unable to persuade us to come to a conclusion that the finding of the Tribunal on this point is wrong or contrary to law as the decisions on which he placed reliance do not aptly apply to the facts of the present case. Therefore, in our opinion, question No. 2 has to be answered in favour of the assessee and against the Revenue. In the result, our answer to question No. 1 is in favour of the Revenue and against the assessee. Similarly, our answer to question No. 2 is in favour of the assessee and against the Revenue. The reference is disposed of accordingly with no order a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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