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2002 (7) TMI 70 - HC - Income TaxBusiness Expenditure - Special Provision - Circular - Revenue has challenged the decision of the Tribunal on two counts, i.e., whether reopening of the assessment is valid and whether furnishing of bank guarantee by the assessee against customs duty amounts to actual payment of customs duty and is not hit by the provisions of section 43B of the Income-tax Act, 1961 - Whether the reopening was bad or illegal, we have to consider the provisions of section 147 as it stood in the relevant years. - In the result, reopening of the assessment in the assessment years 1984-85 and 1985-86 is bad and when the reopening of the assessment is bad, there is no need to go into the merits whether the tax was allowable on the basis of furnishing of a bank guarantee, therefore, we find no reason to interfere in the assessment years 1984-85 and 1985-86. So far as the assessment year 1987-88 is concerned, reopening has been held valid and we found that the furnishing of a bank guarantee is not tantamount to actual payment of the customs duty as required under section 43B, therefore, that has been hit by the provisions of section 43B of the Act, 1961, and the Tribunal has committed error in allowing the deduction of customs duty liability on the basis of a bank guarantee furnished by the assessee.
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