Ramesh Ranganathan - (1.) The Income Tax Appellate Tribunal, Hyderabad bench, has referred the following questions for our opinion. 1. Whether, on the facts and in the circumstances of the case, the provision made for increase in wages on the basis of the Wage Board Award which became enforceable on the date of the publication of the award on 20.07.1983 could be accepted as a liability having accrued on 19.05.1983 within the previous year ended 30.06.1983, when the assessee agreed before the Arbitrators that the award shall come into operation from an earlier date? 2. Whether, on the facts and in the circumstances of the case, on a true construction of the agreements, the provision made for payment of commission by the assessee to the Sri Lankan agents was allowable as an accrued liability? 3. Whether, on the facts and in the circumstances of the case, the expenditure incurred under the agreements with the Sri Lankan agents will amount to an expenditure incurred for maintaining an agency abroad within the meaning of Section 35B(1)(b)(iv) of the Income Tax Act? 4. Whether, on the facts and in the circumstances of the case, the liability to pay the premium for insurance policy could be allowed as accrued liability within the previous year ended 30.06.1983 even though the indemnity depended on payment of the premium which was made only subsequent to the end of the previous year? 5. Whether, on the facts and in the circumstances of the case, the liability to pay commission under the agreement dated 18.08.1981 with M/s. Annapurna Agencies accrued on the procurement of the purchase orders within the previous year ended 30.06.1983? 6. Whether, on the facts and in the circumstances of the case, the liability to pay the liquidated damages under the terms of the agreement accrued when the delivery was made within the previous year ended 30.06.1983? QUESTION No.6:
(2.) In so far as question No.6 is concerned, the Tribunal, in its order in ITA No.834/Hyd/1989 dated 26.03.1991, followed its decision for the earlier assessment year 1982-1983 in the assessees own case, in I.T.A. No.1785 of 1986, and held that the right to receive the extra price arose when the delivery was made, and the assessee had actually accounted for the extra price when the goods were actually delivered. On finding that its order for the earlier year had led to a reference, which was pending in the High Court, Question No.6, as extracted hereinabove, was also referred to this Court.
(3.) This question, in so far as the assessees own case for the earlier assessment year 1982-83 is concerned, was considered in R.C.No.342 of 1991 and a Division bench of this Court, by its order dated 08.08.2013, answered the question in the affirmative, against the revenue and in favour of the assessee. Following the order of the Division bench, in R.C. No.342 of 1991 dated 08.08.2013, we answer question No.6 in the affirmative, against the revenue and in favour of the assessee. QUESTION No.1:;