COMMISSIONER OF INCOME TAX CENTRAL Vs. G SOMAN

JUDGEMENT

(1.) The question raised in the appeal filed by the revenue is whether licence fee payable by the Respondent under the Abkari Laws for obtaining the right to carry on business in toddy flails within the description of tax, duty, cess or fee referred to in Section 43B(a) of the Income-tax Act, 1961 (for short 'the Act') which entitles the Assessee for deduction of the expenditure only if payment is made in the previous year.

(2.) We have heard Standing Counsel appearing for the Appellant and Advocate Sri T.M. Sreedharan appearing for the Respondent.

(3.) The Respondent/Assessee participated in the auction conducted by the State Excise Department for sale of toddy in Kottarakkara and Pathanapuram ranges during the previous year relevant for the assessment year 1999-2000. Even though the Assessee paid full rental/licence fee in the accounting year itself for auction purchase of toddy shops in Pathanapuram range, he withheld payment of Rs. 71,04,010 being part of Rs. 1.72 crores payable for the Kottarakkara range. Consequent upon the non-payment of the rental/licence fee of Rs. 71,04,010 by the due date, i.e., 31-3-1999, the Assessing Officer made disallowance. When the Assessee filed appeal, the first appellate authority following the decision of the Karnataka High Court in CIT v. Sri Balaji & Co., 2000 246 ITR 750 allowed the case which was confirmed by the Tribunal in second appeal filed by the revenue. It is against the order of the Tribunal, the revenue has filed this appeal, challenging the correctness of the findings of the Tribunal.