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Commissioner of Income Tax Versus Hindustan Petroleum Corporation Ltd.

2016 (8) TMI 101 - BOMBAY HIGH COURT

Unpaid sales tax liability - deduction in view of Section 43B - Held that:- The issue raised herein viz. the sales tax collected by the assessee in the last quarter of the year was paid in the subsequent quarter before filing of the return, is to be allowed as a deduction in view of Section 43B of the Act, stands concluded against the Revenue by the decision of the Apex Court in Allied Motors (P.) Ltd. v/s. Commissioner of Income Tax [1997 (3) TMI 9 - SUPREME Court ] . - Decided in favour of the .....

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s on duties/taxes in future. This is so as the payment has been made in the previous year relevant to the subject assessment year. Accordingly question covered by the decision of the Apex Court in Berger Paints India Ltd. (2004 (2) TMI 4 - SUPREME Court ). Accordingly, both the questions are answered in the negative i.e. in favour of the assessee - Income Tax Reference No. 177 of 1998 - Dated:- 18-7-2016 - M. S. Sanklecha And A. K. Menon, JJ. Mr. Suresh Kumar a/w Ms. Samiksha Kanani for the Appl .....

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he facts and in the circumstances of the case and on a true and proper interpretation of the provisions of Section 43B of the Income Tax Act, 1961, the Tribunal was justified in law in holding that the claim for deduction of ₹ 877.38 lakhs in respect of excise duty included in the closing inventory was not admissible in computing the total income? (iii) Whether the finding of the Tribunal that the acceptance of the claim for deduction of excise duty included in the closing inventory would .....

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equent quarter before filing of the return, is to be allowed as a deduction in view of Section 43B of the Act, stands concluded against the Revenue by the decision of the Apex Court in Allied Motors (P.) Ltd. v/s. Commissioner of Income Tax 224 ITR 677. (b) In the above view, the question is answered in the affirmative i.e. in favour of the assessee and against the Revenue. 3. Regarding Question nos.(ii) and (iii)- The brief facts are as under: (a) The assessee claimed that the excise duty aggre .....

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on as it would lead double deduction. The Tribunal emphasized the fact that the respondent had valued the closing stock at cost price. Therefore excise duty paid is also a part of the cost of its stock in trade. Thus, disallowed the claim of the respondent-assessee for deduction under Section 43B of the Act. (c) We find that the decision of the Gujarat High Court in Lakhanpal National Ltd. (supra) arose on identical facts and the excise duty in fact paid was allowed as a deduction under Section .....

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onal Ltd. (supra). Therefore in view of the above decisions the deduction in respect of excise duty paid during the previous year relevant to the subject assessment year under Section 43B of the Act was allowed even though the same was included in arriving at the cost of the closing stock. (d) However, the Revenue contests the aforesaid position by emphasizing the fact that the respondent-assessee had adopted the cost price method of valuing of its closing stock. Therefore, the entire cost has t .....

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