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PR. COMMISSIONER OF INCOME TAX-VADODARA-3 Versus GUJARAT BOROSIL LIMITED

2016 (6) TMI 982 - GUJARAT HIGH COURT

Deduction u/s 43B - non payment of excise duty in cash - adjustment of refund from Central Excise and Customs - Held that:- Department had adjusted the refund claim of the assessee of ₹ 3.71 crores towards its excise duty liability. That being the position, it cannot be said that excise duty of ₹ 3.71 crores was not actually paid over. The claim would not be hit by section 43B of the Act. - Decided against revenue - TAX APPEAL NO. 476 of 2016 - Dated:- 21-6-2016 - MR. AKIL KURESHI AN .....

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provisions of section 43B of the Income-tax Act, 1961 in its true spirit ? 2. Whether, the Tribunal was justified in allowing the claim of the assessee under section 43B of the Income-tax Act as the assessee failed to treat the demand of Central Excise and Customs as actual liability in its books of account and whether by just putting a note to accounts to the annual account being declaration in nature can be termed as incurred liability in the previous year in view of the accounting principles .....

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ground that the assessee had claimed deduction of ₹ 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 excise duty liability can be treated as actual payment. He has also found that demand of the department was not on account of any penalty but was a routine tax demand. The Tribunal upheld the view of the CIT(Appeals) and dismissed the appeal of th .....

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e case and clear cut finding was given that assessee was entitled to 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 adjustment of refund of ₹ 3. .....

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