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M/S Sir Sadi Lal Enter. Ltd. v. C.I.T. - INCOME TAX REFERENCE No. 141 of 1992 [2005] RD-AH 846 (23 March 2005)


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Court No.37

Income Tax Reference No.141 of 1992

M/s. Sir Shadi Lal Enterprises  Vs. Commissioner of Income-tax, Meerut    

Hon'ble R.K. Agrawal, J

Hon'ble Prakash Krishna, J

The Income Tax Appellate Tribunal, Delhi has referred the following  questions of law under section 256 (1) of the Income Tax Act 1961 (hereinafter referred to as the Act) for opinion to this Court:-

At the instance of the assessee applicant the following two questions have been referred:-

1. "Whether  on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the liability for purchase-tax payable, but which was not fallen due for payment under the U.P. Sugarcane (Purchase-tax) Act, 1961, can not be allowed as an expenditure in spite of introduction  of the explanation to Sec. 43 B by the Finance Act, 1987 on the ground that the amendment was not retrospective  in its operation.?"

2. Whether on the facts and in the circumstances of the case the Appellate Tribunal was correct in law in holding that the liability incurred by the assessee under the U.P. Sugarcane (Purchase-tax) Act, 1961, payment of which being linked with the dispatches of sugar & not payable upto the close of the year, can not be allowed as an expenditure under the provisions of Sec. 43 B  despite the fact that no part of such liability could, in fact, be deemed as claimed as having been adjusted  against remission allowed, in terms of Notification dated 24.8.84 and standing to the credit side of the Profit & Loss Account?"

However, at the instance of the Revenue following question has also been referred:-

"Whether in the circumstances of the case, the Tribunal was legally correct to hold that the excess price realised on levy of sugar does not become part of trading receipt until the matter is finally decided in favour of the assessee?"

Briefly stated the facts giving rise to the present reference are as follows:-

Nobody has appeared on behalf of the assessee applicant to press this reference therefore the question referred at the instance of the applicant is being returned unanswered.

So far as the question referred at the instance of the Revenue, the controversy raised therein is squarely covered by a decision of this Court in ITR No.18 of 1993 CIT Vs. Dhampur Sugar Mills Ltd.Dhampur  decided on 25.8.2004 wherein this Court has held that the excess levy sugar price was taxable in the hands of the assessee.

Respectfully following the aforesaid decision we  answer the questions No.1 and 2 referred to us in affirmative i.e. in favour of the assessee and against the Revenue.  There shall be no order as to costs.




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