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2004 (10) TMI 70 - HC - Income TaxDeduction u/s 80J – Deduction on account of Central excise duty liability - "1. Whether Tribunal was right in holding that a new industrial undertaking for manufacture of knives and come into existence and was entitled to section 80J deduction? - On the findings given by the Tribunal we do not find any legal infirmity that the two units are separate and independent and have not been formed by reconstruction or splitting up of the existing unit and the respondent was rightly allowed deduction under section 80J - 2. Whether Tribunal was right in holding that the assessee was entitled to deduction on account of Central excise duty liability?" - Since assessee follows the mercantile system of accounting and the liability of excise duty imposed is statutory in nature and merely because it has not been paid to the Department it would not disentitle the respondent from claiming its deduction - We answer both the questions referred to us in the affirmative, i.e., in favour of the assessee and against the Revenue
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