2005 (1) TMI 59

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.... M.H.S. Ansari J.- This is a reference at the instance of the assessee. The question framed by the Tribunal for our consideration, arising out of its orders in I.T.A. No. 1638/Hyd of 1990, pertaining to the assessment year 1988-89, is as under: "On the facts and in the circumstances of the case, whether the Tribunal is correct in law in its finding that the amount of Rs. 7,85,725 provided by th....

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....ted every month for each scheme for its members. The lucky member, who is successful in the draw, gets his prize, namely, luna, scooter or car, as the case may be. He need not pay the remaining monthly instalments or subscriptions. In this way, 40 draws will be conducted and 40 lucky members would be given prizes. The remaining 210 members out of 250 members, who were unsuccessful in the draws and....

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....s only after the scheme is completed. As long as the liability is not foisted on the assessee, any provision created to meet that liability cannot be allowed. The assessee carried the matter in appeal before the Tribunal. One of the contentions raised before the Tribunal on behalf of the assessee was that the liability of the assessee to pay the extra amount or bonus amount to each of the unsucces....

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....at no liability accrued to the assessee till such time the unsuccessful member pays the final and the 40th instalment. It was observed that the case on hand is not one where the payment depended upon a contingency. In the view of the learned Income-tax Appellate Tribunal, the liability itself is a contingent one and not an accrued liability. In coming to the said conclusion, the learned Income-tax....