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2013 (10) TMI 284 - HC - Income TaxRe-opening of assessment u/s 147 of the Income Tax Act - Basis of re-opening of assessment that excise duty refund received by the assessee should be brought to tax under section 41(1) of the Act – Held that:- The legal liabilities whether remitted or not could have been claimed as deductions. But with the incorporation of sections 41 to 43(B), the proposition has undergone a thorough change insofar as legal liability is payable to Statutory Authority or the Government. No deduction was permitted until the said amounts are actually paid and remitted, and the accounting on annual basis in Mercantile system in respect of the said liabilities stood expressly excluded by law. In the instant case, for the assessment year in question, Section 43(B) applies. The ratio laid down by the Hon'ble Supreme Court in Thirumalaswamy Naidu[1997 (8) TMI 7 - SUPREME Court] case would justify the act of the Assessing Officer in assessing the refund of amount in the hands of the assessee as trade-in-receipts until it was paid back to the Government or distributed to the beneficiaries. In the present case, it appears that the assessee after dismissal of the writ petition has remitted the refund amount to the Excise Department as per law. The fact that the assessee had refunded the amount does not exonerate his accountability under charging Section 41(1) and 43(B) read with Section 147 of the I.T. Act – Decided in favor of Revenue.
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