COMMISSIONER OF INCOME TAX Vs. MADHO LAL SUALAL

JUDGEMENT

(1.) AT the instance of the Revenue, the Tribunal (Delhi Bench) referred the following questions under s. 256(2) of the IT Act, 1961 (briefly, the Act) for opinion of this Court:

(2.) SO far as question No. 1 referred under S. 256(2) is concerned, learned Standing counsel candidly states before us that the same is covered by the decision in Haji Lal Mohd. Biri Works vs. CIT (1997) 140 CTR (SC) 275 : JT 1997(3) SC 223, in which the Court ruled down that when the assessee is following mercantile system of accounting, in case of sales-tax payable by the assessee, the liability to pay sales-tax would accrue the moment the dealer made sales which are subject the sales-tax and, at that stage, the obligation to pay the sales-tax arises and the raising of the dispute in this connection before the higher authorities would be irrelevant. Following the said authority, we are of the view that the view taken by the Tribunal in the matter is correct and, therefore, the question No. 1 is answered in the affirmative, i.e. against the Revenue and in favour of the assessee.

(3.) SO far as question no. 2 is concerned, no such finding has been recorded by the Tribunal and, therefore, this question does not arise from the Tribunal's order. The same is accordingly returned unanswered.