| Case ID |
f9e4e469-b05d-4cca-a964-c12c86a222d4 |
| Body |
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| Case Number |
Tax Case No. 985 of 1984 (Reference No. 881 of 198 |
| Decision Date |
Jul 22, 1997 |
| Hearing Date |
|
| Decision |
The court ruled that the provision made by the assessee for arrears of rent, as per the Government order dated August 26, 1975, was allowable as a deduction in the assessment year 1976-77. The court emphasized that there was no lease agreement between the assessee and the Government or the chief tenant, and the liability to pay rent did not arise on a monthly or yearly basis. The Tribunal's finding that the liability was ascertained only when the Government passed the order was upheld, allowing the deduction based on the mercantile system of accounting followed by the assessee. |
| Summary |
In the case between the Commissioner of Income Tax and Polly Container Industries, the Madras High Court addressed the issue of whether the assessee could claim a deduction for arrears of rent in the assessment year 1976-77. The court found that the assessee, a sub-tenant, was compelled to pay an amount based on a Government order that regularized the collection of rent. Since there was no lease agreement and the liability to pay rent was not established on a monthly basis, the court ruled that the assessee could claim the deduction for the year in which the liability was recognized. This case highlights the complexities of tax law and the necessity for businesses to understand their obligations under the Income Tax Act. |
| Court |
Madras High Court
|
| Entities Involved |
Tamil Nadu Small Industries Development Corporation Limited
|
| Judges |
K. A. THANIKKACHALAM,
N. V. BALASUBRAMANIAN
|
| Lawyers |
C. V. Rajan for the Commissioner,
Nemo for the Assessee
|
| Petitioners |
COMMISSIONER OF Income Tax
|
| Respondents |
POLLY CONTAINER INDUSTRIES
|
| Citations |
2000 SLD 102,
2000 PTD 1114,
(1998) 233 ITR 526
|
| Other Citations |
CIT v. East India Corporation Ltd. (1986) 159 ITR 712 (Mad.),
CIT v. Padmavati Raje Cotton Mills Ltd. (1993) 203 ITR 375 (Cal.),
National Newsprint and Paper Mills Ltd. v. CIT (1978) 114 ITR 172 (MP)
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
Not available
|