TMI Blog2001 (3) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... staff sports and welfare expenses under section 40A(9) of the Income-tax Act?" The appeal came for admission on March 14, 2001. It was heard at length. It was dismissed for reasons to be subsequently given. Hence, the following reasons are being given. Facts on question No. 1: Bharat Petroleum Corporation Limited, a Central Government under-taking is the assessee. In this appeal we are concerned with the assessment year 1985-86. In the computation of income, the assessee claimed deduction of Rs. 12,62,47,225 under the head "Excise and customs duty paid" on the closing stock as on March 31, 1985. The financial year during which the duties were paid was 1984-85. The said amount was also shown in the balance-sheet under the caption "prep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Gujarat High Court in Lakhanpal National Ltd.'s case [1986] 162 ITR 240, excise and customs duty paid and included in the closing stock are allowable deductions from the income. That, section 43B does not bar such deductions. However, such deductions are subject to payment being added to the opening stock in the relevant subsequent year. We respectfully agree with the judgment of the Gujarat High Court in Lakhanpal National Ltd.'s case [1986] 162 ITR 240. This is a pure finding of fact. The Commissioner of Income-tax (Appeals) has also accepted that the afore stated amount is a part of the closing stock. In view of the concurrent finding of fact, no substantial question of law arises. Hence, the first question is answered in the affir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carry on staff welfare activities. Under clause 28, Bharat Petroleum Corporation Limited had a right to issue directives to the club which were binding on the club. At times, the members of the club, who were the employees of Bharat Petroleum Corporation, took part in tournaments held outside the club premises like Times shield in cricket. On such occasions, the assessee-Corporation used to reimburse expenses incurred by the club. This is the finding of fact recorded by the Tribunal. In the circumstances, section 40A(9) is not applicable. No substantial question of law arises. Hence, our answer to the aforestated question No. 2 is in the negative, i.e., in favour of the assessee and against the Department. Accordingly, the income-tax app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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