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2016 (7) TMI 31 - HC - Income TaxRevision u/s 263 - treatment to be given in the opening stock of the subsequent accounting year when the deduction is made under Section 43B - Held that:- There is no dispute on the point that the amount of import duty and excise duty are allowable deduction. What is dispute on behalf of the respondent is that the amount of customs and excise duty on the value of the closing stock of the petitioner-assessee should not be permitted in the assessment year 1984-85 (accounting year ending on December 31,1983), though actually paid in the year 1983, because the assessment of the closing stock of the year 1983 will be in the subsequent previous year which would be in 1984 and the relevant assessment year would be 1985-86. It is true that at the time of making the assessment for the assessment year 1985-86, the respondent will have to be careful in seeing that the petitioner does not claim further deduction for the sum for which deduction is already given. In this case, it is not the contention of the respondent that any sum payable under clause(a) of section 43B of the Act was at any time claimed by way of deduction in any previous year prior to 1983. In fact, the raw material were imported and the goods were manufactured in the year 1983, and they were cleared also in the year 1983. Therefore, their liability accrued in the year 1983, and they also paid the sum in the year 1983. In that view of the matter, the Explanation to section 43B of the Act is also not attracted in the present case. The first limb of argument that Section 145A was not on the statute book at the relevant point of time and therefore this Court may take a different view by not holding that the matter is covered by the decision of the Apex Court in case of Berger Paints [2004 (2) TMI 4 - SUPREME Court ] may require consideration of the effect of Section 43B vis-à-vis Section 145A and to find out as to whether by insertion of Section 145A on the statute book, the effect of the allowable deduction under Section 43B is diluted or nullified or not. The language of Section 43B begins with the word “Notwithstanding anything contained in any other provisions of this Act” meaning thereby a non- abstente clause to have an overriding effect over any other provisions of the Act. The resultant situation would be that the deduction so claimed and made permissible by the Tribunal in the impugned order is covered by the above referred decision of Gujarat High Court in case of Lakhanpal case read with the further decision of the Apex Court in case of Berger Paints Ltd.[ (1986 (3) TMI 42 - GUJARAT High Court). Hence, on the aspects of allowable deduction, the matter was already covered by in any case the decision of the Apex Court in case of Berger Paints India Ltd. (supra). The said legal position was prevailing at the time when the assessing officer allowed the deduction. Hence, it could not be said that the view taken by the assessing officer was erroneous in law. In any case, the treatment is to be given in the opening stock of the subsequent accounting year when the deduction is made under Section 43B of the Act, hence it could also not be said as prejudicial to the interest of Revenue. Under the circumstances, we find that the view taken by the Tribunal holding that the Commissioner was not justified in passing the order under Section 263 of the Act cannot be said as illegal but, can rather be said to be in conformity with the law laid down by the Apex Court in case of Berger Paints India Ltd., (supra). - Decided in favour of assessee
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