COMMISSIONER OF INCOME-TAX DELHI–VII Vs. KWALITY RESTAURANT AND ICE CREAM CO
HIGH COURT OF DELHI
COMMISSIONER OF INCOME-TAX DELHI
KWALITY RESTAURANT AND ICE CREAM CO.
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(1.) AT the instance of the Revenue, the following question of law has been referred for our opinion under Section 256 (1) of the Income Tax Act, 1961 ('act') by the Income Tax Appellate Tribunal ('tribunal'), Delhi Bench E , New Delhi for the Assessment Year 1980-81: whether on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the purchase-tax of Rs. 89,180/- is a trading liability of the assessee, deductible in computing its income.
(2.) THE Assessee is a partnership firm which manufactures ice cream. A firm of the same name that was earlier constituted under a partnership deed dated 16th October 1975 was dissolved with effect from 31st December, 1977. The assets and liabilities of the erstwhile firm were taken over by the assessee firm, under the same name. The assessee firm was constituted by a deed of partnership dated 27th April 1980.
(3.) RELEVANT to the Assessment Year 1974-75 the Sales Tax Department levied purchase tax on the raw material and packing material used by the Assessee in the manufacture of ice cream. The demand raised by the Sales Tax Department for the said Assessment Year 1974-75 was received by the Assessee on 26th March 1979. The accounting period of the Assessee ended on 30th June 1979. The Assessee firm discharged the liability and claimed deduction while computing its income for the Assessment Year 1980-81.;
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