1987 (11) TMI 111

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Corporation of India. It is obliged to purchase wheat at the price fixed by the Government under the Wheat Roller Flour Mills (Licensing and Control) Order, 1957 which was made under section 3 of the Essential Commodities Act. The purchase price of wheat was originally fixed at Rs. 155 per quintal. By a letter dated 27-7-1982, the purchase price of wheat was increased from Rs. 155 to Rs. 185 per quintal with effect from 1-8-1982. In pursuance of the said upward revision of the purchase price of wheat the assessee was asked to pay the price difference of Rs. 30 per quintal on the stock purchased from 1-8-1982. If the assessee did not pay the price difference, then no further quota of wheat was to be released to the assessee. The assessee did....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....3. The assessee appealed to the CIT(A) and contended that its claim should have been allowed. The CIT(A) agreed with the assessee that the liability to pay the price difference arose when the amount was demanded by the Food Corporation of India under the direction of the Government. Hence, he directed the ITO to deduct the sum of Rs. 1,70,595. 4. Shri M. Pal, the learned representative for the department, urged before us that the CIT(A) erred in his decision. He stated that the Calcutta High Court has decided a similar issue in the case of Shalimar Chemical Works (P.) Ltd. v. CIT [1987] 167 ITR 13, holding that the deduction could be allowed only when the matter is finally decided. On the other hand, Shri S. Raman, the learned representa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Rattan Chand Kapoor [1984] 149 ITR 1 (Delhi), it was noticed that the assessee could not have submitted a revised return in respect of an earlier year and the assessee could have claimed deduction of the liability only in the later year or never. That is why in the judgment in the case of Shalimar Chemical Works (P.) Ltd., it has been observed that the principle in the case of Kedarnath Jute Mfg. Co. Ltd. v. CIT [1971] 82 ITR 363 (SC) would not apply strictly and that the Court was not inclined to take a view different from the one taken in the case of Orient Supply Syndicate. The judgment accepted the contention of the assessee that the principle in the case of Kedarnath Jute Mfg. Co. Ltd. was not inflexible and in the special facts and c....