Appeals from the judgement and order dated July 23 and 24, 1962 of the Bombay High Court in Income tax Reference No.
Niren De, Additional Solicitor General, R. Ganapathy lyer and R.N. Sachthey, for respondent in both the appeals .
633 and 634 of 1964.
V. Viswanatha Sastri, S.N. Vakil, T.A. Ramachandran, B. Dadachanji, O.C. Mathur and Ravinder Narain, for the appellant in both the appeals .
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
3 The Company follows the mercantile system of accounting and, therefore, the amount of rebate so reserved is deductible for arriving at the companymercial profit of the Company in the year when the statutory liability arises and number when the amount is actually paid and in the present case the statutory liability for the said two amounts arose in the accounting years of 1952 and 1953.
During the assessment years 1953 54 and 1954 55 the Company claimed deduction of two amounts of Rs.
77,138/ in the assessment year 1954 55 were deductible in companyputing income, profits and gains from the assessees business assessable to tax.
On a further appeal, the Income tax Appellate Tribunal accepted the companytention of the appellant and allowed the deductions.
The Income tax Officer disallowed the claim and on appeal the Appellate Assistant Commissioner agreed with the Income tax Officer.
61 of 1961.
The excess, if any, after making some deductions, the Company has to distribute to its companysumers in the form of rebate.
V. Vishwanatha Sastri, M.N. Shroff and 1.
42,148/ and Rs.
N. Shroff, for the Intervener in all the appeals .
The present appeals have been filed by the Company after obtaining the requisite certificate from the High Court.
77,138/ for the said two years from its taxable income as they were credited to Consumers Benefit Reserve Account.
The Judgment of the Court was delivered by Subba Rao, J. The appellant, the Poona Electric Supply Co., Ltd., hereinafter called the Company, carried on the business of distribution of electricity in the city of Poona under a licence issued by the Government.
A Division Bench of the said High Court answered the question in the negative and against the appellant.
