TMI Blog2011 (1) TMI 323X X X X Extracts X X X X X X X X Extracts X X X X ..... JJ JUDGMENT 1. The present appeal, which pertains to the assessment year 1989-90, raises the following questions of law : "1. Whether the Tribunal was correct in law in directing the Income-tax Officer to calculate the disallowance under rule 6D of the Income-tax Rules, 1962 with reference to the total journeys under-taken in a year and not with reference to each journey undertaken by an employee or director ? 2. Whether the Tribunal was right in holding that the assessee was entitled to exclude excise and customs duties paid from the value of the closing stock ? 3. Whether the assessee is entitled to claim deduction of Rs.14,71,387 on account of excise duty paid in advance as business expenditure ?" 2. Learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him :" 5. It is a common case of the parties that the objective with which the aforesaid provision was introduced was to plug a loophole in the statute which permitted deduction on an accrual basis without the requisite obligation to deposit the tax with the State. Resultantly, on the basis of mere book entries the assessee would claim deduction without actually paying the tax to the State. 6. In the factual matrix of the present case, the controversy arises in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods being removed from the factory premises. It is, thus, contended that the amount of duty is liable for deduction only when the goods are removed from the factory premises. 8. In our considered view, the mischief which is sought to be cured by induction of the provisions of section 43B of the Income-tax Act is sub-served by the payment of the duty to the Department concerned. The procedure envisaged for payment of excise duty envisages such duty to be deposited in advance with the treasury before the goods are removed from the factory premises. The duty, thus, already stands deposited in the accounts of the assessee maintained with the treasury and the amount, thus, stands paid to the State. 9. We are, thus, not in agreemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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