COMMISSIONER OF INCOME TAX Vs. K S MOHAMMED

JUDGEMENT

(1.) AT the instance of the Revenue, the Tribunal, Cochin Bench, has referred the following two questions of law for the decision of this Court :

(2.) THE respondent is an assessee to income-tax. He is an exporter of sea food. We are concerned with the asst. yr. 1979-80, for which the accounting period ended on 31st March, 1979. In respect of the purchase of marine products, the assessee had made a provision for purchase tax in a sum of Rs. 3,45,864. The ITO allowed this provision without much discussion. The CIT, in suo motu revisional proceedings, held that no part of the liability for purchase tax arose during the accounting year and the deduction of Rs. 3,45,864 was an error. He directed revision of the order of the assessment. The matter was taken up in appeal before the Tribunal by the assessee. By order dt. 8th Dec., 1986, the Tribunal followed its earlier order in ITA No. 795(Coch)/1984 dt. 4th Dec., 1986 in the case of S. Ratnam Pillay, wherein the Tribunal had held that the earliest point of time for bringing the amount to tax was only 3rd April, 1979, which fell within the accounting year 1979-80 relevant to the asst. yr. 1980-81. In this view of the matter, the Tribunal held that the CIT was not justified in directing the ITO to tax the amount in the asst. yr. 1979-80 solely based on the date of the notification. It is thereafter, at the instance of the Revenue, the questions of law formulated hereinabove have been referred for the decision of this Court.

(3.) AT the outset, we should state that question No. 2, as formulated by the Tribunal, is a patent error, which has not conveyed the real question that arose for adjudication before the Tribunal and still remains in controversy between the parties. The question formulated has not also reflected question No. 2, which was submitted by the Revenue before the Tribunal. The sole question that arose before the Tribunal was, whether the notification dt. 3rd April, 1979 was available to be taken advantage of, for the accounting period ended on 31st March, 1979. It was not so available in view of the earlier decision in Ratnam Pillay's case [ITA No. 795(Coch)/1984] dt. 4th Dec., 1986. The question is not whether it has ceased to be a liability for the year 1980-81. That was not germane to the issue. So, we reframe question No. 2 in the following manner :