1990 (4) TMI 2

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....erred the following question of law to this court under section 256(1) of the Income-tax Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in treating the contribution to Molasses Storage Reserve Fund created under the U. P. Sheera Niyantran (Sansodhan) Adesh, 1974, as a revenue expenditure ?" The assessment year is 1980-81 for which the rele....

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.... the assessment year under consideration also." The Revenue went up to the Tribunal and the Tribunal held as under: "Addition of Rs. 15,05,815 on account of alleged undervaluation of closing stock of sugar and of Rs. 47,054 on account of contribution to Molasses Storage Fund made by the Income-tax Officer while framing the assessment of the assessee-company for the assessment year 1980-81, h....

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....s under: "10A. Funds for regulation of adequate storage facilities. -Every occupier of a sugar factory shall from the price prescribed in the Schedule referred to in sub-section (1) of section 10 for different grades of molasses, place in a separate fund the amount mentioned below or such other amount as the State Government may notify in that behalf for being utilised for provision and mainten....

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....the expenditure will not augment or improve the capital structure of the assesseecompany in any way. On behalf of the Revenue, it was contended that the assessee has not made any contribution under this statute but has merely created reserve in this account. This argument appears to be misconceived. The only question raised in this reference is whether the contribution made by the assessee t....