MAHABIR SUGAR MILLS (PVT.) LTD. vs COMMISSIONER OF INCOME-TAX, U. P. — 1971 PTD 294

Citation: 1971 PTD 294

Court: Allahabad High Court

Year: 1968

Decision Date: 1968-03-29

Parties: MAHABIR SUGAR MILLS (PVT.) LTD. vs COMMISSIONER OF INCOME-TAX, U. P.

Headnotes

Case cited as 1971 PTD 294

Judgment Text

Court Name: Allahabad High Court Judge(s): R. S. Pathak, V. G. Oak Title: MAHABIR SUGAR MILLS (PVT.) LTD. vs COMMISSIONER OF INCOME-TAX, U. P. Case No.: Income-tax Reference No. 715 of 1963 Date of Judgment:1968-03-29 Reported As: 1971 PTD 294 Result: N/A JUDGMENT JUDGMENT V. G. OAK, C. J.-The question for consideration in this income-tax reference is whether penalty paid under subsection (5) of section 3 of the U. P. Sugarcane Cess Act, 1956 (hereafter referred to as the "Cess Act"), is a permissible deduction under section 10(2)(xv) of the Indian Income-tax Act, 1922. The Mahabir Sugar Mills (Private) Ltd. Is the assessee. It is a private limited company. It used to run a sugar mill. The assessee used to purchase sugarcane. It had to pay cess to the Government under the Cess Act. Cess was assessed against the company in due course. The company did not pay the cess within the prescribed time. The assessee bad, therefore, to pay a sum of Rs. 14,664 as penalty under subsection (5) of section 3 of the Cess Act. The assessee claimed this sum of Rs. 14,664 as a permissible expense and commercial loss. This claim was disallowed by the Income- tax Officer. The assessee appealed and succeeded. The Appellate Assistant Commissioner held that the sum of Rs. 14,664 ought to be accepted as a permissible expendi--ture under section 10(2) (xv) of the Indian Income-tax Act, 1922. The Department appealed to the Income-tax Appellate Tribunal, Allahabad. The appeal was allowed. The Tribunal…

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