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TMI Blog1990 (9) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and in the circumstances of the case and in law, the learned CIT(A) erred in holding that Rs. 75,475 paid through Tata Services is not covered u/s. 37(3A) of the IT Act. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 18,18,097 from the assessment on the ground that the bad debts had been properly written off." 2. Ground No.1. The assessee is a company carrying on the business of printing. The Inspecting Assistant Commissioner of Income-tax (Assessment) (Assessing Officer for short) found that the assessee had debited a sum of Rs. 21,84,319 to the profit and loss account in respect of the liability by way of contributions to gratuity fund, superannuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to pay the statutory dues had arisen is to be ignored for the purpose of allowing deduction in respect of such statutory liability, viz : "(irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him)" The learned Commissioner (Appeals) further found that the Assessing Officer had erroneously presumed that the statutory liabilities specified in section 43B can be allowed only if they accrued during the year and are also paid during the year. 3. During the course of his arguments before us, the learned counsel for the assessee reiterated the same pleas which were made before the Commissioner (Appeals). After a careful considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. Its converse cannot be true. In other words, where as a liability accruing in an earlier year can be claimed as a deduction in a subsequent year if the amount thereof has actually been paid in such subsequent year. It is not legally permissible to claim a deduction, the payment whereof has been made in an earlier year, but the liability whereof may accrue in a subsequent year. To take a contrary view would tantamount to allowing deductions of the payments made in advance. Permitting deduction on the basis of such advance payment is bound to lead to the results which would be incongruent and are not intended by the provisions of section 43B. Allowing deductions of advance payments would open floodgates for the assessees to make advance p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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