2002 (2) TMI 86

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....l has referred the following question for our opinion: "Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding that the contingency reserve is a deductible amount from the total income of the assessee?" The assessee has created a contingency reserve at 1/2 per cent. of the original cost of the fixed assets of Rs. 94,96,282. This, according to the assesse....

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....ply Co. [1985] 154 ITR 812. Heard learned counsel for the parties. Mr. Singhi relied on the decision of the Madras High Court in Vellore Electric Corporation Ltd. v. CIT [1977] 109 ITR 454 and Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585 (SC). This issue has also been considered by the Madhya Pradesh High Court in the case of Keshkal Co-operative Marketing Society Ltd. v. CIT [1987] 165 ITR ....

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....vailable for the use of the assessee-society at its option. Therefore, the real test for such sum to be deductible is that if by making statutory deposits, the assessee loses control over the said amount, being not available for its use, then such amount is certainly deductible from the income as contemplated under sections 36 and 37 of the Income-tax Act, 1961." Considering the admitted facts th....