AJIT K. SENGUPTA, J. ( 1 ) IN this reference, the judgment was delivered on November 9, 1990, giving certain directions to the Tribunal to re-examine the case in the light of the facts and circumstances of the case as highlighted by learned counsel for the Revenue. It was found later that the submission made on the basis whereof the direction was given was not factually correct. Accordingly, the judgment dated November 9, 1990, is recalled. The matter is further heard. ( 2 ) IN this reference under Section 256 (1) of the Income-tax Act, 1961, for the assessment year 1978-79, the following question of law has been referred to this court :"whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the additional corporation tax of Rs. 6,22,718 was allowable as deductions in this year ?" ( 3 ) SHORTLY stated, the facts are that the assessee claimed a sum of Rs. 10,82,484 being expenditure relating to earlier years for which liability was stated to have arisen during the accounting period. This amount included short provision of Rs. 8,37,106 for corporation tax. It was explained that the corporation proposed enhancement of valuation with effect from the third quarter of 1969-70 and the assessee's objection thereto was heard in June, 1976. But the corporation intimated to the assessee its decision in July, 1977, relevant to the assessment year under consideration. Accordingly, it was claimed that the extra liability arose during the year and since the assessee had made short provision for the corporation tax in the earlier years, the difference should be allowed in the assessment year. ( 4 ) THE Income-tax Officer, however, noticed on examination of the documents filed by the assessee as well as on enquiries from the office of the Calcutta Corporation that the corporation revised the assessment in two stages, one for the third quarter of 1969-70 to the third quarter of 1971-72 and the second for the fourth quarter of 1971-72 onwards, by two separate orders. The first rate card was issued on June 30, 1976, and was received by the assessee on July 30, 1976, i. e. , within the accounting year relevant to the immediately preceding assessment year 1977-78. The first rate card was issued on June 30, 1976, and was received by the assessee on July 30, 1976, i. e. , within the accounting year relevant to the immediately preceding assessment year 1977-78. The second rate card for the fourth quarter of 1971-72 onwards was issued by the corporation on July 28, 1977, and was received by the assessee on August 13, 1977, relevant to the assessment year under consideration. So the Income-tax Officer held that the liability for the enhanced corporation tax from the third quarter of 1969-70 to the third quarter of 1971-72 did not arise during the previous year relevant to the assessment year under consideration. The total tax liability according to the assessee for the said period from the third quarter of 1969-70 to the third quarter of 1971-72 worked out to Rs. 6,77,570 and against this the assessee had already paid and provided in its books of account Rs. 4,63,182. The balance amount of Rs. 2,14,388 was claimed by the assessee in this year under consideration. The Income-tax Officer further noticed that the assessee did not claim this expenditure last year because the assessee wanted to have the set off of brought forward deficiency of Section 80j relief from earlier years from its income for that year which would otherwise have lapsed. He was of the opinion that the provision claimed for the fourth quarter of 1971-72 to the end of the earlier accounting year did not arise because the assessee challenged the second assessment by filing a suit. So the Income-tax Officer disallowed the balance amount of Rs. 6,22,718 (i. e. , Rs. 8,37,106-Rs. 2,14,388 ). On appeal, without discussing the facts involved in the case in detail, the Commissioner of Income-tax (Appeals) held that "as far as the assessee-company is concerned, the intimation for liability was received for the first time on August 13, 1977. The date falls in the accounting period relevant to the assessment year 1978-79". As such he was of the opinion that the liability on account of additional corporation tax was allowable in the assessment year under consideration. On further appeal, the Tribunal maintained the finding of the Commissioner of Income-tax (Appeals), following its earlier order dated June 23, 1986. ( 5 ) THE facts are not in dispute. As such he was of the opinion that the liability on account of additional corporation tax was allowable in the assessment year under consideration. On further appeal, the Tribunal maintained the finding of the Commissioner of Income-tax (Appeals), following its earlier order dated June 23, 1986. ( 5 ) THE facts are not in dispute. The final assessment card commonly known as the rate card was received for the two periods in the previous year relevant to the assessment year under reference. The Tribunal, therefore, came to the conclusion that there was no justification in not allowing the claim made by the assessee in this year. It is now well-settled that, in the event the demand notice for tax is received during the previous year relevant to the assessment year in question, such demand has to be allowed in computing the total income of the assessee. As a matter of fact, the confusion arises regarding the manner and method of the assessment made under the relevant Act. There was also some confusion as regards the nature of the notice, viz. , whether it was a show cause or a notice for final assessment upon hearing the objections which is usually communicated to the assessee by the corporation after hearing the objections by a postcard commonly known as the red card. It is only the year in which such red card was received by the assessee although the revised assessment might have been made earlier which would be the crucial factor in determining the question whether the allowance will be allowed in the year under reference or not. The Tribunal found that the demand notices upon revision of assessment were received by the assessee during the previous year in question. ( 6 ) FOR the aforesaid reasons, the question in this reference is answered in the affirmative and in favour of the assesses.