1984 (11) TMI 61

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....ing year relevant to the assessment year 1977-78, and was, therefore, deductible in the assessment for 1977-78 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in directing that liability to excise duty in sum of Rs. 44,312 should be allowed in computing the income for 1977-78 ? " The facts of the case, as per the statement of the case received, may be stated, in brief, thus : The assessee, M/s. Ratlam Straw Board Private Ltd., is a private limited company, deriving income from the manufacture and sale of strawboards. It had business contracts with the Director General of Supplies and Disposals for supplies within the stipulated time. The assessee failed to supply the agreed quantity of ....

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....f Supplies and Disposals arose during the accounting year relevant to the assessment year 1977-78, and was, therefore, deductible for 1977-78. He submitted that the assessee has been maintaining accounts on the mercantile system and, consequently, in view of the Supreme Court decisions in CIT v. Gajapathy Naidu [1964] 53 ITR 114 and CIT v. Swadeshi Cotton and Flour Mills Pvt. Ltd. [1964] 53 ITR 134 as also the decision in Trikamlal v. CIT [1982] 134 ITR 450 (MP), the answer to question No. 1 has to be decided in favour of the Revenue. The learned counsel for the respondent-assessee in fairness submitted that in view of these decisions, question No. 1 has to be answered in favour of the Revenue. The second question relates to the liabilit....