Delhi High Court
Indo Imex Agencies (P) Ltd. vs Cit on 6 August, 2001
Equivalent citations: 2001 119 TAXMAN 714 Delhi
Author: A Pasayat
JUDGMENT
Arijit Pasayat, C.J.
These two reference applications contain identical questions and are, therefore, taken up together for disposal. Pursuant to the direction given by this court under section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as the Act), following question has been referred for opinion of this court by the Tribunal, Delhi Bench-C :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the liability in respect of the sum of Rs. 29,269 incurred by the assessed-company to the foreign suppliers of transformers as a result of devaluation of the Indian rupee, was not a liability pertaining to the assessment year 1972-73 ?"
Dispute relates to assessment years 1971-72 and 1972-73.
2. Factual position in nutshell is as follows :
2. Factual position in nutshell is as follows :
The assessed at the relevant point of time was a private limited company. For the assessment year 1971-72, there was disallowance of Rs. 29,269 in respect of the claim of the foreign suppliers acknowledged by the assessed. The assessed, as a representative, had imported transformers for and on behalf of Bihar State Electricity Board in 1965-66. Before the whole amount could be paid, Indian rupee was devalued in 1966. The Romanian concern asked the assessed to make payment as per the devaluation rate. The assessed, however, disowned the liability on the ground that it was only a representative of Bihar State Electricity Board, the real importer of the transformer. Board did not make any payment on the ground that it had paid the sum in accordance with the agreement entered into in this behalf. Ultimately the matter came to the notice of the Government of India. The Foreign Trade Ministry discussed the matter with the assessed on 17-1-1970 and directed the assessed-company to pay the sum in the interest of Indo-Romanian relationship. The assessed agreed to pay the said amount in the subsequent years and paid the amount in part in 1972-73 and the balance in 1973-74. It was contended by the assessed, in these circumstances that it was entitled to the deduction. The revenue, however, took the stand that the said amount could not be allowed as deduction since the assessed had failed in the duties of its contractual obligation. The Tribunal, on appeal by the assessed, took the view that the amount in question could not be considered in the assessment year 1971-72. The Ministry of Foreign Trade, Government of India had asked the assessed to make the payment subsequently. The assessed, apart from this fact, had also not paid the amount so far and was disputing liability and was still asserting that liability was that of the Board. The Tribunal, therefore, held that on the facts and in the circumstances of the case, claim of the assessed could be considered only in the year or years in which amounts were in fact paid. Prayer for reference was made, which was rejected. On being moved for reference as noted above, the question as set out above has been referred for opinion of this court.
3. We have heard the learned counsel for the revenue. There is no appearance on behalf of assessed in spite of notice.
3. We have heard the learned counsel for the revenue. There is no appearance on behalf of assessed in spite of notice.
4. The learned counsel for the revenue submitted that conclusions of the Tribunal are essentially factual giving rise to no question of law.
4. The learned counsel for the revenue submitted that conclusions of the Tribunal are essentially factual giving rise to no question of law.
5. As recital of the factual position indicated in the statement of facts goes to show that the Tribunal has taken note of the relevant facts and has come to hold that the claim could be considered only in the year or years in which the amounts were in fact paid. That being the position, no question of law arises out of the order of the Tribunal which needs our answer.
5. As recital of the factual position indicated in the statement of facts goes to show that the Tribunal has taken note of the relevant facts and has come to hold that the claim could be considered only in the year or years in which the amounts were in fact paid. That being the position, no question of law arises out of the order of the Tribunal which needs our answer.
The references are, accordingly, disposed of.
