COMMISSIONER OF INCOME TAX Vs. GENERAL TRADING AGENCY

JUDGEMENT

(1.) THE material facts as on record and the proceedings leading up to this reference are, inter alia, that General Trading Agency, Mokamah, the assessee, is a registered partnership firm carrying on business in grains and milling cereals. THE assessee follows the mercantile system of accounting.

(2.) THE assessee was assessed to sales tax under the Bihar Sales Tax Act, 1959, for the period 1968-69.

(3.) BEING aggrieved, the assessee preferred a further appeal before the Income-tax Appellate Tribunal. It was contended before the Tribunal on behalf of the assessee that by the order of assessment of sales tax made by the Superintendent of Commercial Taxes, Patna Circle, Patna, dated November 11, 1970, an extra demand was raised against the assessee on account of sales tax during the relevant accounting year. This was an extra demand made during the relevant accounting year and as such the deduction of the same had to be allowed in this assessment year. The assessee relied on an order of the Tribunal, in its own case relating to the earlier assessment year 1970-71, passed in Income-tax Appeal No. 419 of 1974-75 where, in similar circumstances, the Tribunal had accepted the claim of the assessee for deduction on account of sales tax which was finalised in a subsequent assessment year. It was held in the earlier order that though this additional demand was being disputed in appeal, as the demand was raised against the assessee in the assessment year in question and was in addition to the amount collected by the assessee from its customers on account of sales tax, the same should be allowed as deduction in the relevant assessment year.