TMI Blog2004 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... elivered by B.N. SRIKRISHNA J.- Leave granted. The assessee is a company engaged in the manufacture and sale of paints, varnishes and other allied products. During the previous year ending on December 31, 1983, pertaining to the assessment year 1984-85, the petitioner in its returns had disclosed a sum of Rs. 1,33,31,370 as income. During this period, the appellant-assessee had incurred expenditure on account of customs and excise duty aggregating to Rs. 5,85,87,181, which was duly debited to the profit and loss account of the petitioner for the relevant previous year and was also fully paid during the relevant previous year. In addition thereto, the petitioner had also credited to the profit and loss account of the relevant previous y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 263 of the Act on the ground that the Assessing Officer had wrongly allowed the claim for deduction of an amount of Rs. 98,25,833 towards customs and excise duty paid during the previous year but credited to the profit and loss account in closing stock of goods under the provisions of section 43B. The assessee relied upon the judgment of the Gujarat High Court in takhanpal National Ltd. v. ITO [1986] 162 ITR 240 [hereinafter referred to as "Lakhanpal National Ltd.'s case"] in support of its claim. The Commissioner of Income-tax took the view that the Gujarat High Court's decision was distinguishable on facts and, therefore, made an order under section 263 of the Ad disallowing the claim of the assessee. On appeal to the Tribunal, the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation 2 to section 43B coming into force with effect from April 1, 1984, the Tribunal was justified in law in directing to allow the amount of Rs. 77,81,948 under section 43B of the Income-tax Act, being Central excise and customs duty which had been included in the value of closing stock?" For the assessment year 1987-88, the Tribunal allowed a similar claim and a reference came to be made to the High Court in the following terms: "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in directing the Income-tax Officer to allow the sum of Rs. 24,28,428 being Central excise and customs duty under section 43B of the Act on the ground that the said amount has been included in the value of closing s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he counter affidavit of the Department. In addition to these three High Court judgments, it appears that, noticing the conflicting views taken by the Tribunals a Special Bench of the Income-tax Appellate Tribunal was constituted to resolve the issue. In Indian Communication Network Pvt. Ltd. v. IAC of I.T. [1994] 206 ITR (AT) 96 (Delhi), the Special Bench of the Tribunal considered all the conflicting judgments and the judgment in Lakhanpal National Ltd.'s case [1986] 162 ITR 240 (Guj) as also its own order in the case of the appellant-assessee reported in Berger Paints India Ltd. v. CIT [1993] 44 ITD 573 (ITAT) (Cal). After noticing all the conflicting views, and the attempt made by the Tribunal in Hindustan Computers Ltd. v. ITO [1987] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso not been challenged. This fact is also not disputed by the Revenue. In view of the judgments of this court in Union of India v. Kaumudini Narayan Dalal [2001] 249 ITR 219; CIT v. Narendra Doshi [2002] 254 ITR 606 and CIT v. Shivsagar Estate [2002] 257 ITR 59, the principle established is that if the Revenue has not challenged the correctness of the law laid down by the High Court and has accepted it in the case of one assessee, then it is not open to the Revenue to challenge its correctness in the case of other assessees, without just cause. The judgment of the Gujarat High Court in Lakhanpal National Ltd.'s case [1986] 162 ITR 240 was relied upon and followed by the Bombay High Court in CIT v. Bharat Petroleum Corporation Ltd. [200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut forward. The decision in Lakhanpal National Ltd.'s case [1986] 162 ITR 240 (Guj), which clearly laid down the interpretation of section 43B was followed by the judgments of the Madras High Court and Bombay High Court and was again followed by the decision of the Special Bench of the Income-tax Appellate Tribunal, none of which have been challenged. In these circumstances, the principle laid down in Union of India v. Kilumudini Narayan Dalal [2001] 249 ITR 219 (SC); CIT v. Narendra Doshi [2002] 254 ITR 606 (SC) and CIT v. Shivsagar Estate [2002] 257 ITR 59 (SC) clearly applies. We see no "just cause" as would justify departure from the principle. Hence, in our view, the Revenue could not have been allowed to challenge the principle laid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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