1988 (4) TMI 89

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..... for that reason but also following an earlier order of his relating to the assessment year 1976-77, wherein a similar claim made by the assessee was disallowed. 2. The learned counsel for the assessee Shri M.A. Bakshi submitted that notwithstanding the fact that no appeal was filed against the order of the Commissioner (A) for the earlier year, it could not be held against the assessee and the assessee is entitled to re-agitate the matter in a subsequent year. This is perhaps based on the principle of non-applicability of rule of res judicata in income-tax proceedings. He also relied upon a decision of the Supreme Court in the case of Jwala Prasad Agarwal reported in 86 ITR 154. We find force in the submission and we would like to decide .....

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..... as only the ascertainment of the fees, that could be estimated and that estimated amount could be allowed as a deduction. The assessee-company estimated its liability on the basis of the fees paid in the past. Therefore the amount should be held to be reasonably estimated and allowed as a deduction. 4. The Departmental Representative opposed these submissions and relying upon the orders of the authorities below submitted that in this case the auditors were not appointed at all in the accounting year and therefore the question of providing for any fees for them did not simply arise. The disallowance was therefore proper and justified and should be upheld. 5. During the course of hearing of this appeal the learned Advocate on behalf of the .....

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..... been different had either the auditors been appointed and audit been conducted but the fees not fixed or the auditors appointed but audit was not conducted but fees fixed, in which case it could be said that the liability to pay the audit fees arose. Such being not the case before us now, we are unable to arose with the view canvassed on behalf of the assessee that the liability to pay the audit fees arose in the accounting year merely on the basis of the provision made by the Company Law Board. We therefore agree with the view expressed by the Commissioner (A). But the assessee would be entitled to the deduction of the fees as and when it was paid. There should therefore be no objection to allow the amount as a deduction in which assessme .....

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