Punjab-Haryana High Court
Commissioner Of Income-Tax-I vs M/S. Arihant Industries Ltd on 21 July, 2010
Author: Ajay Kumar Mittal
Bench: Adarsh Kumar Goel, Ajay Kumar Mittal
Income- tax Appeal No. 100 of 2004
1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
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Income-tax Appeal No. 100 of 2004
Date of decision: 21.7.2010
Commissioner of Income-tax-I,
Ludhiana
--- Appellant
Versus
M/s. Arihant Industries Ltd.
Ludhiana
--- Respondent
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CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
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PRESENT: Mr. R.P. Sawhney, Senior Advocate with
Mr.
for the appellant-Revenue.
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AJAY KUMAR MITTAL, J.
Income- tax Appeal No. 100 of 2004 2 This appeal filed under Section 260A of the Income- tax Act, 1961 (for short "the Act") at the instance of the Revenue is directed against the order of the Income- tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh ( for short " the Tribunal") passed on 16.9.2003, in Income- tax Appeal No. 1128/CHANDI/98, for the assessment year 1992-
93. The assessee company sends goods for processing to its processing house. While getting the goods back, the assessee pays excise duty and such duty increases the cost of the manufactured and processed goods and, thus, becomes part of the sale price. The assessee, however, does not increase the value of the closing stock by the amount paid on account of excise duty and yet claims deduction under Section 43B on the basis of actual payment. For the assessment year 1992-93, the assessee filed return declaring total income as Nil. The return was processed under Section 143(1)(a) of the Act and assessment was completed vide order dated 25.1.1995 after allowing depreciation and brought-forward depreciation to the extent of Rs. Income- tax Appeal No. 100 of 2004 3 2,86,73,294/-. It was noticed during the course of assessment proceedings that the assessee had claimed deduction under Section 43 B amounting to Rs.20,14,444/- on account of excise duty paid and mentioning it as recoverable. The assessee claimed that amount as its loss in and that too, in respect of the goods which had not been sold and were lying with it in its closing stock. The assessing officer disallowed the deduction so claimed by the assessee on the aforesaid count.
The view of the assessing officer was upset in appeal carried by the assessee and the Commissioner of Income- tax (Appeals) Ludhiana [(in short "the CIT (A)"], vide order dated 21.7.1998 deleted the disallowance claimed under Section 43B, made by the assessing officer. While doing so, the CIT(A) observed that earlier as well, i.e. for the assessment years 1984-85 and 1985-86 in the case of the assessee itself, the same question had arisen for consideration before the Tribunal and the Tribunal had ordered the exclusion of the excise duty paid but not claimed as deduction from the value of the closing stock. Income- tax Appeal No. 100 of 2004 4 This is how the matter came to be carried before the Tribunal at the instance of the Revenue. The Tribunal, after following its own decision in the case of the assessee itself, for the assessment years 1985-86 and 1986-87, upheld the order of the CIT ( A), vide order dated 16.9.2003. It is all that prompted the Revenue to file the instant appeal proposing that the following substantial question of law arises for determination by this Court:
"Whether in view of the circumstances and facts of the case, the Hon'ble Income-tax Appellate Tribunal erred in deleting the disallowance made by the Assessing Officer amounting to Rs. 20,14,444/- on account of excise duty claimed as deduction but not included in the value of closing stock?
Learned counsel for the parties are agreed that the Tribunal, while hearing the appeal carried at the instance of the Revenue for the assessment year 1992-93 had relied upon its own decision in Income- tax Appeal Nos. 912, 652 and 1408/ Chandi/89 rendered in the case of the Income- tax Appeal No. 100 of 2004 5 present assessee itself pertaining to the assessment years 1985-86 and 1986-87 and had, vide order dated 16.9.2003, ordered exclusion of the excise duty paid but not claimed as deduction from the value of the closing stock, and out of which Income- tax Reference Nos. 573 to 575 had arisen. It has been further agreed that question Nos. 1 and 3 raised in those References are similar to the one proposed in this appeal. The counsel also agreed that in view of decision of the apex Court in of the apex Court in CIT vs. Alom Extrusions Ltd. (2009) 319 ITR 306 (SC), and order of this Court in Income- tax Reference Nos. 573-575 of 1993 (Commissioner of Income- tax- I, vs. M/s. Arihant Industries Ltd. Ludhiana), of even date, the issue stands concluded against the Revenue. Accordingly, the substantial question proposed in this appeal is decided against the Revenue and in favour of the assessee.
The appeal stands disposed of accordingly.
(AJAY KUMAR MITTAL)
JUDGE
Income- tax Appeal No. 100 of 2004
6
(ADARSH KUMAR GOEL)
July 21, 2010 JUDGE
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