TMI Blog1999 (5) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... 990-91. Thus, the Revenue is in appeal before us. 3. After hearing the rival submissions we are of the opinion that the issue is squarely covered against the assessee and in favour of the Revenue by the decision of the Hon'ble Calcutta High Court in the case of CIT vs. Upper Ganges Sugar Mills Ltd. (1993) 114 CTR (Cal) 375 : (1994) 206 ITR 215 (Cal). We therefore, set aside the order of the CIT(A). The disallowance made by the AO is thus restored. 4. Ground No. 2 in asst. yr. 1991-92 and Ground No. 1 for the asst. yr. 1992-93 pertain to the disallowance made by the AO under s. 40A(9) of the Act. Facts in short are that the assessee made contributions to Stone India Recreation Corner and J. Stone Employees Credit Co-operative Society Ltd. Since the payments were made to unapproved institutions, the AO disallowed the same under s. 40A(9) of the Act. CIT(A) set aside the disallowance by following the decision of the Tribunal in the case of M/s A.P.E. Bellis India Ltd. in ITA Nos. 527 to 531 (Cal) of 1989, dt. 13th Feb., 1992. 5. Aggrieved, Revenue is in appeal before us. Learned counsel appearing on behalf of the assessee-company, relied upon the decision of the Tribunal. On the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3A has relied on the decision of the Supreme Court in the case of Arvind Mills Ltd. vs. CIT (1992) 101 CTR (SC) 91 : (1992) 193 ITR 255 (SC). 4. That, on facts and circumstances of the case, the learned CIT(A)'s reliance on the case of Arvind Mills Ltd. is not acceptable since the CBDT has not accepted this decision and vide its circular sought the opinion of the Union Ministry of Law in this regard. 5. On facts and circumstances of the case, the order of the learned CIT(A) be set aside and the order of the AO be restored." 9. Due to exchange rate fluctuation, there has been increase in the liability towards amount payable to the foreign sellers on the plant and machinery purchased by the assessee-company, to the tune of Rs. 8,81,531. Assessee-company included the additional liability and on the additional cost also depreciation was claimed under s. 32 of the Act. According to the AO, such increase in the cost is only a notional increase in the value and is not backed by actual remittance since the extra liability was not remitted during the year He, therefore, disallowed the claim of depreciation proportionately. 10. Aggrieved, assessee contended before the CIT(A) that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to the judgment of the Hon'ble Patna High Court in the case of Amar Singh Yadav vs. Shanti Devi AIR 1987 (Pat) (FB) 191 at p. 198 wherein their Lordships observed as under: "When judgment of the superior Courts are of co-equal Benches, and, therefore, a matching authority, then their weight inevitably must be considered by the rational and the logic thereof and not by the mere fortuitous circumstance of the time and date on which they were rendered. Equally, the fact that the subsequent judgment failed to take notice of the earlier one or any presumption that a deviation therefrom could not be intended, cannot possibly be conclusive. Vital issues, pertaining to the vital questions of the certainty and uniformity of the law, cannot be scuttled by such legal sophistry. It is manifest that when two directly conflicting judgments of the superior Court and of equal authority exist, then both of them cannot be binding on the Courts below. A choice, however difficult it may be, has to be made in such a situation and the date cannot be the guide. However, on principle, it appears to me, that the High Court must in this context follow the judgment, which would appear to lay down the la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... additional cost. The Hon'ble Bombay High Court has, in fact, relied upon the decision of the Hon'ble Supreme Court in the case of Arvind Mills Ltd. in order to arrive at the conclusion that the amount of loan outstanding on the last date of the accounting year at the then prevailing exchange rate had to be added to the actual cost of the machinery for the purpose of computation of depreciation for that year. In our opinion, the interpretation placed upon the relevant provision by the Hon'ble Bombay High Court, Karnataka High Court and the Calcutta High Court in the case of Kanoria Chemicals and Industries Ltd. is the correct interpretation on the issue and deserves to be followed, particularly in the light of the decision of the Hon'ble Patna High Court (FB). For this reason the order of the CIT(A) on this issue does not call for interference. 13. Ground Nos. 2 and 3 in the appeal filed for the asst. yr. 1982-83 are as under: "2. That on facts and circumstances of the case, the learned CIT(A) has erred in law in allowing the assessee's claim for excluding excise duty from the total turnover for computing deduction under s. 80HHC. 3. That on facts and circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce (No. 2) Act, 1991] is contrary to the decision of the Pune Bench of the Tribunal Sudarshan Chemical Industries Ltd. vs. Dy. CIT (1997) 57 TTJ (Pune) 718 : (1997) 60 ITD 629 (Pune) wherein the decision of the Calcutta Tribunal was followed while dealing with identical issue for the asst. yr. 1989-90 and, therefore, the view beneficial to the assessee should be adopted; (d) interpretation must depend on the text and the context- if the text is a texture, context is what gives the colour and, therefore, neither can be ignored. It is the duty of the Court to iron out the creases by taking the text and context into consideration in interpreting a legislation and by considering the provision in the backdrop of the purpose for which the section is introduced. The following case laws were relied upon on this issue: (a) Gramophone Co. of India Ltd. vs. Birendra Bahadur Pandey AIR 1984 SC 667; 678 (b) Manickam Co. vs. State of Tamilnadu 39 STC 12, 17 (SC); (c) CGT vs. N.S. Getti Chettiar 1972 CTR (SC) 349 : (1972) 82 ITR 599, 605 (SC) (d) New India Sugar Mills Ltd. vs. CST AIR 1963 SC 1207, 1213; (e) Reserve Bank of India vs. Peerless General Finance Investment Co. Ltd. AIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee-company was based on the following reasons: (a) Liability for excise duty arose at the time of production and not at the time of despatch of finished goods from the factory; (b) Liability is thus statutorily deferred till the time the goods are despatched though it accrued; (c) As per Expln. 2 to s. 43B such amount is allowable as deduction; (d) The amount of Rs. 6.59 lakh now being claimed was not provided in the accounts. Despite this, it is allowable as deduction in view of the decision of the Hon'ble Supreme Court in the case of Kedarnath Jute Mills Ltd. vs. CIT (1971) 82 ITR 363 (SC). 18. The claim of the assessee was rejected by the AO on the following grounds: (1) assessee consistently followed the policy of claiming the excise duty liability only on payment basis and on that count, the impugned amount has not been provided in the accounts; (2) during the year, assessee has debited Rs. 4.14 crore as excise duty in its P L a/c on payment basis. Thus, it is apparently contradicting its own method of accounting. (3) excise duty in the present case has not become enforceable as per Excise Act. Thus, it cannot be treated as ascertained liability but remaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Excise Act, the liability to pay excise duty arose soon after manufacture of the goods but the requirement of paying the excise duty is deferred till the date of clearance of finished goods from the factory. Explanation 2 to s. 43B says that the term 'any sum payable' means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law. It could be seen that the Explanation speaks of the amount payable in the previous year as well as the amount which are not payable within that year. In other words, liability such as excise duty liability which accrues soon after the completion of the production but the liability to pay is postponed, is also covered by the term "any sum payable" and, therefore, s. 43B is attracted. Such being the case, assessee is entitled to claim deduction of any sum on the basis of actual payment, during the previous year or at any time before the expiry of the time for furnishing the return. We, therefore, do not find any infirmity in the order of the CIT(A). Needless to observe that the assessee is not entitled to claim the same amount in any subsequent year. 22 ..... 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