1986 (2) TMI 14

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....ess of running a colliery. It is not in dispute that in respect of the colliery, royalty was payable by the assessee to the State Government for every month by the 15th day of the next month, failing which interest at the rate of 12 per cent. per annum became payable on the amount of royalty in arrears by the assessee. In the assessment year 1970-71, the corresponding accounting period ending o....

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....ear were submitted before the Appellate Assistant Commissioner calculated at Rs. 30,010. The Appellate Assistant Commissioner held that the liability for payment of interest would arise in the hands of the assessee only on issue of a notice of a public demand raised by the Certificate Officer. Till such notice was issued, it could not be said that there was any liability to pay interest on outstan....

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....eld that deduction should have been allowed to the extent the provision was made by the assessee in its accounts for meeting the said liability which had accrued. The claim of the assessee was allowed. On an application of the Revenue under section 256(1) of the Incometax Act, 1961 (" the Act "), the following question has been referred as question of law arising out of the order of the Tribuna....