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TMI Blog2007 (5) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner. JUDGMENT 1. We have heard learned counsel for the assessee and learned counsel for the Income-tax Department. 2. The following four questions have been referred in this case, two at the instance of the assessee and two at the instance of the Department: "At the instance of the assessee : 1. Whether, on the facts and in the circumstances of the case and in accordance with law, the Tribunal was justified in rejecting the assessee's claim for deduction in respect of a sum of Rs. 7,93,793 being the compensation payable to M/s. M. W. Hardy and Co., New York? 2. Whether, on the facts and in the circumstances of the case and in accordance with the provisions of law, the Tribunal was right in holding that relief und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iability of the assessee, which liability has been incurred, even though not discharged during the relevant year. 4. Even assuming for the sake of argument that those decisions lay down such a proposition as suggested, it is quite clear that the liability, which is contemplated to have been incurred should not be a contingent liability, that is to say it should not be contingent upon the happening or not happening of future events. 5. In the case before us, the assessee under the earlier contract was alleged to be liable to make payment of a certain amount on compensation. However, that liability stood modified by a subsequent contract between the parties, which provided that compensation under the earlier contract would be paid and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against the profit of the other. The second question referred at the instance of the assessee is therefore, answered against the assessee and in favour of the Department. 10. The first question referred at the instance of the Revenue is covered in favour of the Revenue and against the assessee by the decision of the Supreme Court in the case of CIT v. Sterling Foods [1999] 237 ITR 579 (SC); [1999] UPTC 599 as applied by a Division Bench of this court in the case of CIT v. Himalaya Cutlery Works [2006] 287 ITR 505. The said question No. 1 referred at the instance of the Revenue is, therefore, decided in favour of the Department and against the assessee. 11. The second question referred at the instance of the Department is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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