KUNDAN SUGAR MILLS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) UNDER Section 256(1) of the Income -tix Act, 1961, the Income -tax Appellate Tribunal, Delhi Bench C, has at the instance of the assessee submitted a statement of the case inviting the opinion of this court on the following questions :

(2.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in deleting the sums of Rs. 3,49,742 and Rs. 44,509 being the extra price payable for the purchase of sugarcane by Messrs, Kundan Sugar Mills and Pannijee Sugar Mill?, respectively, as a deduction under the provisions of the Income -tax Act ?'

(3.) THE assessee for the assessment year 1961 -62 provided Rs. 3,49,742 as extra price payable by Kundan Sugar Mills and Rs. 44,509 as extra price payable by Pannijee Sugar Mills under the provisions of the Sugar -cane (Control) Order. The Income -tax Officer disallowed this claim on the ground that it was a mere provision made for an anticipated liability and that the liability actually came to be ascertained in a much later year. On appeal, the Appellate Assistant Commissioner reversed the findings of the Income -tax Officer and directed the allowance of these sums. On appeal by the department the Income -tax Appellate Tribunal reversed the order of the Appellate Assistant Commissioner and restored that of the Income -tax Officer. Thereupon, at the instance of the assessee, question No. 2 has been referred to this court for its opinion.