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2019 (10) TMI 1199 - AT - Income TaxDeduction eligible u/s 43B - excise duty paid under protest - security deposit from a customer - HELD THAT:- The settled legal position of law is that liability to pay tax arises by virtue of the charging section alone though quantification of the amount payable is postponed, as held in the case of Kesoram Industries & Cotton Mills Ltd. v. CWT [1965 (11) TMI 41 - SUPREME COURT] and then again in the case of Setu Parvati Bayi v. CWT [1967 (12) TMI 4 - SUPREME COURT] . Similar was the view in the case of Chatturam v. CIT [1947 (4) TMI 8 - FEDERAL COURT] that liability to tax does not depend on assessment; that ex hypothesis has already been fixed : the assessment order only quantifies the liability which is already definitely and finally created by the charging sections [Ishwarlal Parekh v. State of Maharashtra [1968 (5) TMI 1 - SUPREME COURT] Therefore the fact that in the absence of an assessment order or absences of entries in the books of accounts is no bar to claim as deduction of excise duty of tax. The excise duty is attracted the movement the activity of manufacturing is complete. Therefore crystallization of liability is established in the year of manufacturing. Admittedly, during the year under consideration, the goods were not manufactured. However, since the excise duty is allowable as deduction on payment basis under the provisions of Section 43B of the Act, though the liability is pertaining to earlier years, the excise duty paid is allowable as deduction under the provisions of Section 43B of the Act. Similarly, the amount received towards reimbursement of excise duty from its distributor M/s. Roshan Commercial Private Limited is a trading receipt which is taxable under the provisions of Section 41 of the Act in the light of the judgment of Hon’ble Supreme Court in the case of Chowringhee Sales Bureau P. Ltd vs. CIT, [1972 (10) TMI 4 - SUPREME COURT] - Decided against assessee.
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