LegalCrystal - Indian Law Search Engine -

Transcription

1 LegalCrystal - Indian Law Search Engine - The Commissioner of Income-tax (Central) Vs. Raj Motors LegalCrystal Citation : legalcrystal.com/ Court : Allahabad Decided On : Sep Reported in : (2006)201CTR(All)461; [2006]284ITR489(All) Judge : R.K. Agrawal and ;Rajes Kumar, JJ. Acts : Income Tax Act, Sections 10(1), 10(2) and 256(1); War Risks (Goods) Insurance Ordinance, Sections 7A Appeal No. : Income Tax Reference No. 61 of 1991 Appellant : The Commissioner of Income-tax (Central) Respondent : Raj Motors Advocate for Def. : S.P. Gupta, ;S.D. Singh and ;V.K. Bisl, Advs. Advocate for Pet/Ap. : A.N. Mahajan, Adv. and ;S.C. Judgement : Rajes Kumar, J. 1. At the instance of the Revenue, the Income Tax Appellate Tribunal, Allahabad has referred the following question under section 256(1) of the Income-tax Act (hereinafter referred to as 'the Act') relating to the assessment year for opinion to this Court: 'Whether in law and in circumstances of the case, the Hon'ble Income-tax Appellate Tribunal was justified in allowing assessee's claim of Rs. 2,76,419/- representing Case price difference, holding that the liability accrued and arose during the accounting period relevant to the assessment year under consideration as a result of final agreement dated ?' 2. The brief facts of the case are as follows. 3. The assessee-opposite party (hereinafter referred to as the 'assessee') deals in sales of motorcars and their spare parts as a dealer of M/S Premier Automobiles Ltd. During the course of assessment proceedings for the assessment year , it was noticed that the assessee had debited a sum of Rs. 2,76,419/- in profit and loss account under the head 'Car price Difference paid to M/S Premier Automobiles Ltd.' and accordingly claimed it as deduction during the year under consideration from its total income. The amount of Rs. 2,76,419/- represented difference in the selling price of the car by M/S Premier Automobiles Ltd. as fixed by the notification of the

2 Government in September 1969 and the price refixed on the judgment of the Hon'ble Supreme Court of India in November Consequent upon the increase in prices by the Government, the Principals had asked the assessee to make further payment on the purchases made earlier. The prices fixed by the Government vide their Notification dated was found to be unremunerative and, therefore, M/S Premier Automobiles Ltd. challenged the notification issued by the Government of India before the Hon'ble Supreme Court by filing a Writ Petition. The Judgment of the Hon'ble Supreme Court was delivered on and consequently the price was enhanced on the basis of this decision. The principals thereafter demanded the difference from the dealers. Since the assessee did not recover this amount from the customers, it denied the liability and created a dispute with the principals i.e. M/S Premier Automobiles Ltd. as according to them the liability was restricted to the recovery that could be affected from the customers. Later correspondence between the assessee and the principals started with the letter issued by the principals dated , immediately after the Supreme Court's judgment was delivered. As per demand notice dated , the principals had raised additional demand of Rs. 3,39,571/- being the difference between the prices charged and the revised prices consequent to the Hon'ble Supreme Court's order. Correspondence between the assessee and the principals revealed that there was contractual liability to pay the difference to the principals in case the prices were revised upward by the Supreme Court, which is evident from the letter datedl issued by the principal. After a long correspondence between the assessee and the principals, the liability in question was finally settled at Rs. 3,00,000/-, as per agreement dated The amount in question after adjustment of the amount of Rs. 23,580/-which was collected from the customers, worked out to RS. 2,76,419/- as payable by the assessee. The assessee made this payment during the year under consideration and accordingly claimed it as deduction from its income on the ground that they had denied the liability which had arisen during the period September, 1969 to 1971 and had accepted it in September, 1981, which accrued only after the receipt of the letter dated The Assessing Officer declined to accept this contention of the assessee and accordingly rejected the assessee's claim of Rs. 2,76,419/- mainly on the ground that the recovery had been made from the customers from October, 1970 onwards, which is evident from the facts that out of Rs. 3 lacs, a claim of Rs. 2,76,419/- only was made after adjustment of an amount of Rs. 23,580/- recovered from the customers in the earlier years. The Assessing Officer had held that the liability in question did not relate to the assessment year under consideration, but it relates to the period 1969 to 1971, therefore, the liability accrued in the year 1971 when the claim of Rs. 3,39,571/-was made vide demand notice dated just after the judgment of the Hon'ble Supreme Court which was delivered. 4. Being aggrieved by the aforesaid decision of the Assessing Officer, the assessee preferred an appeal before the C.I.T.(Appeals), who confirmed the said addition after considering the entire correspondence and the judgment of the Hon'ble Supreme Court. 5. Being dissatisfied with the aforesaid decision of the CIT (Appeals), the assessee took up the matter before the Tribunal, which allowed the appeal filed by the assessee holding that the liability in question was undoubtedly relatable to the period September, 1969 to April, 1971 but this was not a statutory liability which was created by statute against the assessee. The Tribunal also observed that the dispute in question got its final shape not in 1971 or 1972 but on when both the sides finally mutually agreed it upon. Therefore, it held that the liability to pay

3 accrued and arose on the date of this final settlement i.e. in the accounting period under consideration relevant to the assessment year Heard Sri A. N. Mahajan, learned Standing Counsel appearing on behalf of the Revenue and Sri S.D.Singh, learned counsel appealing on behalf of the respondent assessee. 7. Learned Standing Counsel submitted that the assessee followed mercantile system of accountancy. The liability was related to the purchase of vehicle during the period September 1969 to April, 1971 by the assessee from M/S Premiere Automobiles Ltd. He submitted that after the order of the Apex Court on , demand notice dated was raised for Rs. 3,39,571/- by M/S Premier Automobiles Ltd against the assessee, therefore, the liability to pay the amount accrued in the year 1971 and the assessee being following mercantile system of accountancy should have made the provisions in their books of account in the year 1971.He submitted that as per agreement dated 20th September, 1981, the settlement arrived at Rs. 3 lacs was towards quantum but so far as liability is concerned the same was accrued in the year 1971 itself and, therefore, the Tribunal has erred in allowing the deduction in the year under consideration. In support of his contention, he relied upon the decisions in the case of CIT v. Laxman Das reported in : [2000]246ITR622(All), Saraya Sugar Mills (P) Ltd. v. CIT reported in : [1979]117ITR344(All), CIT v. Roberts Mclean & Co. Ltd reported in : [1978]111ITR489(Cal), CIT v. Oriental Motors Car Co. (P) Ltd, reported in : [1980]124ITR74(All) and Swadeshi Cotton Mills Co. Ltd v. CIT reported in : [1980]125ITR33(All). 8. Learned counsel for the assessee submitted that the dispute relating to the price between M/S Premier Automobiles Ltd and the Government arose and M/S Premier Automobiles has challenged the notification issued by the Government of India dated 21st September, 1969 fixing the price of the Fiat Car and the assessee was not the party to the said case. He submitted that after the interim order dated , a demand has been raised vide letter dated for Rs. 3,39,571/- relating to the sales of vehicle for the period September, 1969 to April, 1971 representing difference in the selling price of the car as fixed by M/S Premier Automobiles Ltd and the notification of the Government. He submitted that after the receipt of the letter the assessee objected the demand vide its letter dated 20lh January, 1982 which was not accepted by M/S Premier Automobiles Ltd and further letter dated 18th February, 1982 was written. Thereafter, the quota of the car has been reduced by M/S Premier Automobiles Ltd. Thus, the assessee felt constraint to settle the issue and accordingly wrote a letter dated 13th August, 1981 and in pursuance thereof a final settlement has been arrived between the assessee and M/S Premier Automobiles Ltd vide agreement/letter dated 20lh September, 1981 on an amount of Rs. 3 lacs payable in monthly instalment of Rs. 20,000/-each month. However, after the deduction of the amount already paid a sum of Rs. 2,76,490/- has been paid during the year under consideration towards final settlement vide letter dated 20lh September, 1981, therefore, the deduction has been rightly claimed being accrued during the year under consideration. 9. We have perused the order of the Tribunal and given our anxious consideration to the submissions of the learned counsel for the parties. 10. The short question for consideration is when the liability accrues whether liability to payment accrued in the year 1971 when after the decision of the Apex Court the

4 demand has been raised by M/S Premier Automobiles Ltd for Rs. 3,39,571/- or the date when the settlement had arrived between the parties on 20th September, In the case of CIT v. Laxman Das (supra) there was a compulsory acquisition of the land. The compensation and the interest has been enhanced which has been disputed by the Government by filing an appeal before the High Court. The matter was subjudice before the High Court. The assessing authority added the amount of additional compensation and the interest as accrued during the year in which it was enhanced. The Tribunal deleted the addition on the ground that the matter has not been finally settled and has been disputed; therefore, the amount could not accrue during the year under consideration. Following the decision of the Apex Court in the case of Commissioner Income-Tax v. Hindustan Housing and Land Development Trust Ltd reported in : [1986]161ITR524(SC), this court upheld the view of the Tribunal. 12. In the case of Saraya Sugar Mills (P) Ltd. v. CIT (supra), the rent for 10 years paid in lump sum. The assessee was maintaining mercantile system of accountancy. The Division Bench of this Court has upheld the disallowance of rent in full in the assessment year in which it was paid as the liability to pay the rent accrued in each of the year in which the payment was to be made. 13. In the case of CIT v. Roberts Mclean & Co. Ltd (supra), the assessee company was dealing in machinery and was maintaining books in the mercantile system of accountancy. Certain differences arose between the company and its sole-selling agents, which were referred to arbitrator. The award was made against the company on 14th March, 1980 for Rs. 1,05, paise with interest thereon at the rate of 5 1/2 percent from January, 1959 upto the date of the award. The company then transferred part of the said interest to the interest account of the earlier year and Rs. 1,08, paise as principal sum and balance interest to the profit and loss account for the year ending July 31, For the assessment year , the Income Tax Officer disallowed the claim of deduction of Rs. 1,08,370/- made by the company, which was subsequently allowed in first appeal and by the Tribunal. In the reference, the Calcutta High Court upheld the view of the Tribunal. The Calcutta High Court has held that the company has incurred business liability not in the earlier year but in the accounting year when the matter has been settled in arbitration. 14. In the case of CIT v. Oriental Motors Car Co. (P) Ltd (supra) it has been held that in the previous year relevant to the assessment year , the assessee was a dealer ofcars, tractors, cycles, scooters and spare parts, etc had supplied 42 tractors to the Public Works Department, which in turn, distributed these tractors to various districts. The assessee's principals required the assessee to pay infringement commission on the sale of these tractors to its various dealers in other districts and the dealers in other districts were entitled to commission on the sale of these tractors. A demand at the rate of Rs. 930/- per tractor was made by the principal but the assessee did not agree to it. Subsequently, on May 19, 1972, the matter was settled and the assessee was asked to pay infringement commission to dealers in other districts at Rs. 650/- per tractor. The assessee accepted the claim, paid the amount which worked out to Rs. 32,650/-. The assessee claimed deduction of the aforesaid amount in the assessment year in which the principal required to assessee to pay the infringement commission. The assessing authority disallowed the deduction. The Tribunal allowed the deduction and held that the assessee was

5 maintaining its accounts on mercantile basis, and as the principals had demanded the amount in the assessment year the assessee rightly made provision for the liability as infringement commission and as such the assessee was entitled to deduction of the entire amount in the assessment year In reference, at the instance of the Revenue, this Court held that the deduction was not allowable in the assessment year The Court held that liability accrued only on 19th May, 1972 when the assessee admitted the liability. The court held as follows: ' It is settled that the mere fact that an assessee keeps his account on the mercantile system does not give him a handle to debit liability of every kind whatsoever. The liability that can be debited is only that which is certain, and which arises in present. In the present case, although M/S Escorts Ltd had made a claim for infringement commission, the assessee was contesting that rate, and not admitting his liability. He agreed to pay an amount of Rs. 650 per tractor on the 19th May, 1972, i.e., after the relevant previous year had closed. The liability was of a contractual nature and crystallized only when the assessee agreed to the payment of Rs. 650 per tractor, and not at any point of time earlier. Counsel relied on the decision of the Supreme Court in the case of Kedarnath Jute. v. CIT : [1971]82ITR363(SC) and the decision of this Court in the case of CIT v. Sugar Dealers : [1975]100ITR424(All). The case of Kedarnath Jute. : [1971]82ITR363(SC) is clearly distinguishable, for, in that case, the liability for sales tax arose by virtue of the statute as soon as the sale was effected. Such is not the case here. The assessee's case is not that the liability arose as soon as it supplied the tractors to the public works department at Lucknow. His contention is that the liability arose when a claim to that effect was lodged with it by M/S Escorts Ltd. The assessee did not admit this contractual liability earlier than the 19th May, Nothing was brought on the record to show that the agency contract fixed a liability as soon as the infringement took place. It also appears to us that the amount of Rs. 950/- per tractor claimed by M/S Escorts Ltd. was negotiable, for, ultimately, the matter was settled at Rs. 650 per tractor. In such circumstances, it cannot be said that an ascertainable liability arose to the extent of Rs. 950 per tractor as soon as M/S Escorts Ltd had made the claim. In our view, the liability for the amount arose when the assessee admitted the liability at the rate of Rs. 650 per tractor which is evidenced by the letter of the 19th May, 1972.' 15. In the case of Swadeshi Cotton Mill. Co. Ltd v. Commissioner of Income-Tax reported in : [1980]125ITR33(All), the assessee-company was carrying on the business of manufacturing yarns and cloth. In its assessment for the assessment year , the assessee claimed a deduction of Rs. 18,533/-, being the sum paid to the Ahmedabad Textile Industry Research Association towards its annual contribution for the year ending March 31, There had been some dispute between the assessee on the one hand and the Association on the other with regard to that bill and the payment was ultimately made in the previous year relevant to the assessment year, The Tribunal, agreeing with the revenue, held that the payment related to the period April 1, 1957, to March 31, 1958, and could not be allowed in the calendar year 1959, which was the previous year for This Court held the liability in respect of Rs. 18,533/- accrued in the previous year relevant to the assessment year and the claim of the assessee was clearly allowable. The Division Bench of this Court held as follows. 'In our opinion, there is much substance in the submission made before us on behalf of the assessee and we agree that in the case of a statutory liability the quantification or ascertainment cannot postpone its accrual, but if the Hability is based on some

6 contractual obligation, it arises only when it is ascertained. The case of Jute Mfg. Co. Ltd. : [1971]82ITR363(SC) is an instance where the liability arose as a result of a statutory provision. In that case, the assessee company which followed the mercantile system of accounting incurred a liability of Rs. 1,49,776/- on account of sales tax determined to be payable by the sales tax authorities on the sales made by it during the calendar year 1954, the previous year relevant to the assessment year The sales tax demand was raised pending the Income tax assessment for that year and the assessee claimed deduction of that liability in that assessment. The ITO rejected the assessee's claim on the ground that the assessee had contested the sales tax liability in appeals and further had not made any provision in its books in record to the payment of that amount. The view taken by the Supreme Court was that the assessee was entitled to the deduction of that sum being the amount of sales tax which it was liable under the law to pay during the relevant accounting year. That liability did not cease to be a liability because the assessee had taken proceedings before higher authorities for getting it reduced or wiped out so long as the contention of the assessee did not prevail. Further, the fact that the assessee had failed to debit the liability in its books of account did not debar it from claiming the sum as a deduction either under section 10 (1) or Section 10 (2) (xv) of the Act of The principle laid down was, 'Whether the assessee is entitled to a particular deduction or not will depend on the provision of law relevant thereto and not on the view which the assessee might take of his rights nor can the existence or absence of entries in the books of account be decisive or conclusive in the matter?' On the other hand, Kanpur Tannery Ltd. v. CIT : [1958]34ITR863(All), CIT v. Swadeshi Cotton and Flour Mills P. Ltd : [1964]53ITR134(SC) and CIT v. Banwari Lal Madan Mohan : [1977]110ITR868(All) can be cited as some of the instances of a liability arising as a result of some contractual or similar obligations. In Swadeshi Cotton and Flour Mills P. Ltd. : [1964]53ITR134(SC), the assessee was required to pay profit bonus to its employees and for the calendar year 1947 it made the payment in terms of an award made on January 13, 1949, under the Industrial Disputes Act. It debited the amount in its profit and loss account for the year 1948 but in fact paid it to the employees in the calendar year That liability was treated as an allowable deduction only in 1949 when the claim to profit bonus was settled by the award of the Industrial Tribunal. The view taken was that an employer who follows the mercantile system of accounting incurs a liability towards profit bonus only when the claim, if made, is settled amicable or by industrial adjudication. In Kanpur Tannery Ltd. : [1958]34ITR863(All), the liability was in respect of deficiency of premium payable to the insurance company. The view taken by this Court was that since under section 7A of the War Risks (Goods) Insurance Ordinance, 1940, an officer authorised by the Government was to determine the deficiency in the premium, payment of which had been evaded by the assured, the liability was ascertained only on such determination and was then to be an allowable deduction under section 10 (2) (xv) of the Act of It was held that unless the liability has become an ascertained sum of money, it no doubt exists and proceedings have yet to be taken in some way or the other to determine the exact amount. A Vague liability to make a payment cannot be entered in the accounts. Similarly, in Banwari Lal Madan Mohan : [1977]110ITR868(All) a Division Bench of this Court, to which one of us was a party, (Hon'ble C.S.P.Singh, J) it was held that the amount paid in excess of what was set apart to meet the sales tax liability arose on its quantification and then alone it could be claimed for deduction in the mercantile system of accounting.'

7 16. In the case of Commissioner of Income Tax, West Bengal v. Hindustan Housing and Land Development Trust Ltd reported in : [1986]161ITR524(SC), the land was compulsorily acquired under the land acquisition proceedings. The arbitrator fixed additional compensation. Against the said award, the Government preferred appeal. In pursuance of the Court's order, the amount was deposited and the court permitted the assessee to withdraw the amount only on furnishing of security. The Apex Court held that although the award was made by the arbitrator on July 29, 1955 enhancing the amount of compensation payable to the respondent, the entire amount was in dispute in the appeal filed by the State Government and the dispute was regarded by the Court as real and substantial because the respondent was not permitted to withdraw the amount deposited by the State Government without furnishing a security bond for refunding the amount in the event of the appeal being allowed. There was no absolute right to receive the amount at that stage. If the appeals were allowed in its entirety, the right to payment of enhanced compensation would have fallen altogether. The extra amount of compensation was not income arising or accruing to the respondent during the previous year relevant to the assessment year In the present case, admittedly, the liability is not of a statutory nature and was in the nature of contractual liability. Before the Supreme Court M/S Premier Automobiles Ltd has challenged the Government Notification fixing the price. The assessee was not the party before the Supreme Court. Vide interim order dated 16th April, 1961 for the period from September, 1969 to the date of interim order dated 16th April, 1971 the recommended price were more than the notified price and accordingly M/S Premier Automobiles Ltd wrote a letter on 1st December, 1971 bringing its attention the following extract from the judgment of the Supreme Court as follows: 'For the period September, 1969 to the date of the interim order Premier Automobiles have agreed that the maximum price will be those which have been stipulated in the undertakings obtained by them from the dealers that these shall, in no case, exceed the price to be computed by the manufactures in accordance with the commission's report as modified by our decision for the period September, 1969 by the commission (this is same as fixed by our interim order) from 1st July, 1970 till April 16, 1971(the date of our interim order). 18. The aforesaid Premier Automobiles Ltd. contended that in terms of the Circular letter No. SF/134 dated 24th September, 1969, it was the dealer, namely, the assessee who was responsible to make the payment to the manufacturer, the following either from its own sources or after realising from the customers. The claim of the said Premier Automobiles Ltd. was for Rs. 3,39,571/- as conveyed in their demand notice dated 30th of November, The aforesaid claim of Premier Automobiles Ltd. was objected to by the assessee vide its letter dated 28th of January, 1972, wherein the following, was inter alia, submitted by the assessee for the consideration of the Premier Automobiles Ltd: 'During my personal discussions with you in the conference I had clearly brought that our liability on this account can only be to the extent we are able to realize the difference from the customers. I again reiterate that our responsibility of payment the Car Price Difference is limited to whatever money we are able to recover from the customers. You will kindly

8 appreciate that it is not possible for Raj Motors to pay this amount out of their own coffers. However, I assure you that vigorous efforts will be made to recover the amount from the customers but as I have already explained to you in the conference the task is not easy at all.' 19. The Tribunal, found that the dispute between the manufacturer and the dealers all over the Country with regard to the aforesaid subject matter continued throughout the period 1974 upto 1981 and at one stage, the dealers even contemplated taking legal action to defend their position, but on 15th of July, 1981, the management of Premier Automobiles Ltd again wrote to the assessee stating that it should settle its account and also demanding from the assessee interest accrued on the aforesaid outstanding amount. In the meanwhile, the quota of the cars of the dealership has been reduced by M/S Premier Automobiles Ltd and in such circumstances the assessee felt constrained to accept the claim of the assessee and accordingly a letter dated 13th August, 1981 was written to the Premier Automobiles Ltd as follows: 'Let me assure you of my utmost sincerity to settle this matter, I myself feel very unhappy about the delay, which unnecessarily causes misunderstandings in our long established and extremely good business relationship. I think it is futile to go into the local aspects of the matter because I find myself unable to see how we can be made liable to pay to you something, which was never recovered by us from the customers. However, in consultation with the other partners of the firm and having regard to our continuing business relations. I am prepared to have a reasonable settlement, which should be fair to both of us. I think it shall be best if this is done across the table. Due to my failing health, I cannot undertake a journey to Delhi or Bombay. I do not know whether you have any plan to visit Lucknow in the near future but I would be very happy if a meeting with you could be possible. Alternatively, if Mr. Bhaskar may have a meeting. I am sure a way can be found out to clear this smatter. I have spoken to him about this on telephone yesterday and I have requested him to get from you clarification on certain points before our meeting takes place. In particular I would expect that our liability is fixed at a fair amount and the payment is spread over a reasonable time. This will necessarily require a reasonable relation with the supply schedule of cars allotted to us and a realistic re-appraisal of the future car supply schedule for our firm. I have also explained to him that there is no justification for our being required to pay any interest on this amount either for the past or for the agreed period of instalments. I hope you will give your concurrence to Mr. Bhaskar on these points.' 20. Ultimately, the matter has been finally settled and in this regard a letter dated 20th September, 1981 has been written by the General Manager, Marketing, Premier Automobiles Ltd as follows: 'In response to your letter No. RM/S:37-A/998-A dated and pursuant to the meeting the undersigned had with your son Mr. Anand Narain today. I confirm the following arrangement reached between your firm and Premier Automobiles Limited for the settlement of our claim for recovery of price difference for Fiat Cars supplied to your firm:-

9 1. This settlement covers full claims of Premier Automobiles Limited for the recovery of difference in the price of cars supplied by Premier Automobiles Ltd. to Raj Motors during the period to , and also covers any other claim arising in that connection in consequence of the Supreme Court Judgment delivered on in the car price fixation matter. 2. It has been agreed between Premier Automobiles Limited and Raj Motors that all the aforesaid claims have been settled at Rs. 3,00,000/- (Rupees three lacs) and both the parties have satisfied themselves about the amount. 3. That the aforesaid agreed amount is accepted by Raj Motors as a liability due to Premier Automobiles Ltd and Premier Automobiles Ltd agreed to accept the discharge of this liability in monthly installments of Rs. 20,000/- (Rupees Twenty Thousand) each payable to the end of each month, the first of such instalment becoming payable in October, 1981 and thereafter every month. 4. That it is agreed that no interest shall be payable in respect of the said instalments/liabilities to be discharged by Raj Motors.' 21. The aforesaid correspondence clearly shows that it is the claim of the Premier Automobiles Ltd that the assessee was responsible for making the payment of the differential amount and the assessee has not accepted such liability. In any view of the matter, the nature of the liability was a contractual liability, which was finally settled, vide agreement/letter dated 20th September, 1981 and, therefore, the liability to payment accrued only when it has been finally settled on 20th September, The various decisions of Court referred hereinabove, clearly held that the liability of a contractual nature accrues when it is finally settled. The facts of the present case is almost similar to the facts in the decision of this Court in the case of CIT v. Oriental Motors Car Co. (P) Ltd (supra), which has been referred hereinabove. In the said case, the decision of the Supreme Court in the case of Kedar Nath Jute v. CIT reported in : [1971]82ITR363(SC) has also been considered and distinguished on the ground that in the said case, liability of sales tax arose by virtue of the statute as soon as the sale was effected. The Division Bench of this Court clearly held that the contractual liability accrues when it is finally settled. From the fact stated hereinabove, it is clear that in the present case the liability was not in the nature of statutory liability. The demand raised by M/S Premier Automobiles Ltd was disputed by the assessee which was in the nature of contractual liability which was finally settled only on 20th September, 1981 and thus liability to pay accrued only on 20th September, 1981 relating to the year under consideration and has been rightly held as allowable deduction by the Tribunal in the year under consideration. 22. In view of the foregoing discussions, we answer the question referred to us in the affirmative i.e. in favour of the assesse and against the revenue. However, there shall be no order as to costs. LegalCrystal - Indian Law Search Engine -