2016 (6) TMI 982

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..... against the judgment of the Income-Tax Appellate Tribunal raising following questions for our consideration: "1. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in allowing deduction of Rs. 3,71,42,093/- under section 43B on account of adjustment of refund from Central Excise and Customs without interpreting the provisions of section 43B of the Income-tax .....

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..... tment had raised a demand of Rs. 4.50 crores and adjusted assessee's refund claim of Rs. 3.71 crores against such demand. It was in this background that the assessee had claimed deduction of Rs. 3.71 crores on actual payment basis. The Revenue contends that such claim would be hit by section 43B of the Income-tax Act, 1961. 3. The CIT(Appeals) found that adjustment of the refund towards excis .....

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..... the said deduction under section 43B of the Act on the payment basis and further held that the demand raised was not on account of penalty as claimed by the A.O. But was a routine demand. We are in full agreement with CIT(A) on this point. The assessee has also given note in the "notes to accounts" to the annual account mentioning the facts qua the said demand raised by the Excise Department and .....

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..... Kedarnath Jute to hold that irrespective of the fact that the liability was not accounted for in the books, it was deductible under mercantile system of accounting when liability has accrued. Therefore, once the company makes the payment, whether under protest or otherwise, by debiting Profit and Loss account or by showing in the Balance Sheet or as contingent liability the same will be available .....

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..... ismiss the appeal of the Revenue on this point." 4. As noted, the facts are simple. Department had adjusted the refund claim of the assessee of Rs. 3.71 crores towards its excise duty liability. That being the position, it cannot be said that excise duty of Rs. 3.71 crores was not actually paid over. The claim would not be hit by section 43B of the Act. Tax Appeal is therefore, dismissed.
Cas .....

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