COMMISSIONER OF INCOME TAX Vs. KERALA TRANSPORT COMPANY

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal referred the following question under Section 256(1) of the Income-tax Act, 1961 (briefly, "the Act"), relating to the assessment year 1985-86, for the opinion of this court :

(2.) THE facts, as i'ound by the Tribunal, are that the assessee--a partnership firm--engaged in the business of transportation of goods, made a provision of Rs. 9,58,532 in its books following the mercantile system of accounting in the previous year relating to the assessment year 1985-86 and claimed deduction in respect of the said amount. THE provision represents the loss claimed by claimants for non-delivery or short-delivery of their goods.

(3.) ON appeal, the Commissioner of Income-tax (Appeals) concurred with the view taken by the Assessing Officer almost for the same reasoning, as recorded by the latter. The Commissioner of Income-tax (Appeals) found as follows :