1998 (4) TMI 76

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.... 1954-55, 1955-56, 1959-60 to 1964-65, 1970-71 and 1971-72. The assessee in fact was following the "mercantile system of accounting". According to the provisions of the Electricity (Supply) Act, 1948, the assessee has to make a provision for rebate to consumers. The assessee denied its responsibility to create reserve for rebate to the consumers. The Government, however, did not agree with the contention of the company and the company had to create a reserve. There is a charge on the company. If only such reserve had been created in the relevant accounting years, it should have been allowed as a charge on the profits of the company. Even when the Government quantified the reserve to be created, the company ignored such a direction and....

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....oner. On further appeal, the Income-tax Appellate Tribunal, Madras Bench-"D", Madras (for short "the Tribunal"), also concurred with the view of the Commissioner of Income-tax (Appeals). It is on these facts, the Tribunal, at the instance of the assessee, referred the question of law, as below, for the opinion of this court : "Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal, is right in holding that a sum of Rs. 6,76,921 contributed during the previous year to the reserve for rebate to consumers in respect of the accounting years 1950-51 to 1964-65, is not to be deducted in arriving at the taxable profits of the assessee ?" Arguments of Mr. P. H. Aravind Pandian, of Subbaraya Aiyar, Padmana....