1990 (11) TMI 19

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....r is further heard. In this reference under section 256(1) of the Income-tax Act, 1961, for the assessment year 1978-79, the following question of law has been referred to this court : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the additional corporation tax of Rs. 6,22,718 was allowable as deductions in this year ?" Shortly stated, the facts are that the assessee claimed a sum of Rs. 10,82,484 being expenditure relating to earlier years for which liability was stated to have arisen during the accounting period. This amount included short provision of Rs. 8,57,106 for corporation tax. It was explained that the corporation proposed enhancement of valuation with effect from the t....

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.... to the assessee for the said period from the third quarter of 1969-70 to the third quarter of 1971-72 worked out to Rs. 6,77,570 and against this the assessee had already paid and provided in its books of account Rs. 4,63,182. The balance amount of Rs. 2,14,388 was claimed by the assessee in this year under consideration. The Income-tax Officer further "noticed that the assessee did not claim this expenditure last year because the assessee wanted to have the set off of brought forward deficiency of section 801 relief from earlier years from its income for that year which would otherwise have lapsed. He was of the opinion that the provision claimed for the fourth quarter of 1971-72 to the end of the earlier accounting year did not arise bec....