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2015 (6) TMI 180 - HC - Income TaxAllowable business expenditure - excise duty levied by the Custom & Central Excise Settlement Commission - Held that:- The additional excise duty were to be borne by the contract manufacturers, the contract manufacturers would have accounted for that amount in the purchase price of the goods, resulting in a higher price to be paid by the assessee. Therefore, this situation is, as per the ITAT's own explanation, 'revenue neutral' as well. The AO's determination that the payment was made by the assessee on behalf of contract manufacturers as a part of a collusive attempt to evade tax, is thus, baseless. This sum of additional excise duty, was the differential amount which became payable only upon the passing of the said order and thus, became crystallized in the subject assessment year. Therefore, even though the excise duty was for manufacturing activity that occurred earlier, the liability to pay such additional duty did not exist in the previous years and as a result, could not have been claimed by the assessee as expenditure in the concerned previous years. In arriving at this conclusion, this Court relies upon its ruling in Rattan Chand Kapoor (1984 (2) TMI 60 - DELHI High Court)affirmed by this Court in Shri Ram Pistons & Rings Ltd [2008 (5) TMI 631 - DELHI HIGH COURT]. Thus the sum of ₹ 4,94,09,120/- paid by the assessee towards additional excise duty on behalf of the contract manufacturers constitutes deductible expenditure under Section 37(1) of the Act - Decided in favour of the assessee
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