9911796707
TMI Blog2004 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,33,31,370 as income. During this period, the appellant-assessee had incurred expenditure on account of customs and excise duty aggregating to Rs. 5,85,87,181, which was duly debited to the profit and loss account of the petitioner for the relevant previous year and was also fully paid during the relevant previous year. In addition thereto, the petitioner had also credited to the profit and loss account of the relevant previous year an amount of Rs. 98,25,833 relatable to the customs and excise duty on the closing stock of inventory by including the &aid sum in the valuation of such closing stock. During the assessment proceedings for the assessment year 1904-85, the appellant-assessee claimed that under section 43B of the Income-tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relied upon the judgment of the Gujarat High Court in takhanpal National Ltd. v. ITO [1986] 162 ITR 240 [hereinafter referred to as "Lakhanpal National Ltd.'s case"] in support of its claim. The Commissioner of Income-tax took the view that the Gujarat High Court's decision was distinguishable on facts and, therefore, made an order under section 263 of the Ad disallowing the claim of the assessee. On appeal to the Tribunal, the Tribunal held that the Gujarat High Court's judgment in Lakhanpal National Ltd.'s case [1986] 162 ITR 240 was distinguishable and confirmed the order of the Commissioner of Income-tax. On an application made under section 256(1) of the Act at the instance of the appellant-assessee, the Tribunal, inter alia, referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 987-88, the Tribunal allowed a similar claim and a reference came to be made to the High Court in the following terms: "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in directing the Income-tax Officer to allow the sum of Rs. 24,28,428 being Central excise and customs duty under section 43B of the Act on the ground that the said amount has been included in the value of closing stock?" The High Court by its judgment dated February 6, 2002, disposed of both the references. The questions referred in both the references were answered in favour of the Revenue and against the assessee. An application made for certificate to appeal to this court under section 261 of the Act was rejected by the Calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (AT) 96 (Delhi), the Special Bench of the Tribunal considered all the conflicting judgments and the judgment in Lakhanpal National Ltd.'s case [1986] 162 ITR 240 (Guj) as also its own order in the case of the appellant-assessee reported in Berger Paints India Ltd. v. CIT [1993] 44 ITD 573 (ITAT) (Cal). After noticing all the conflicting views, and the attempt made by the Tribunal in Hindustan Computers Ltd. v. ITO [1987] 21 ITD 524 (ITAT) (Delhi), to distinguish the observations made in Lakhanpal National Ltd.'s case [1986] 162 ITR 240 (Guj), the Special Bench of the Tribunal made the following observations at [1994] 206 ITR (AT) 96, at page 114: "We would like to make it absolutely clear that the removal of the amount in question from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the correctness of the law laid down by the High Court and has accepted it in the case of one assessee, then it is not open to the Revenue to challenge its correctness in the case of other assessees, without just cause. The judgment of the Gujarat High Court in Lakhanpal National Ltd.'s case [1986] 162 ITR 240 was relied upon and followed by the Bombay High Court in CIT v. Bharat Petroleum Corporation Ltd. [2001] 252 ITR 43 as well as by the Madras High Court in Chemicals and Plastics India Ltd. v. CIT [2003] 260 ITR 193. The Special Bench of the Tribunal also relied upon the judgment of the Gujarat High Court in Lakhanpal National Ltd.'s case [1986] 162 ITR 240. The Revenue has attempted to distinguish the judgment of the Gujarat High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been challenged. In these circumstances, the principle laid down in Union of India v. Kilumudini Narayan Dalal [2001] 249 ITR 219 (SC); CIT v. Narendra Doshi [2002] 254 ITR 606 (SC) and CIT v. Shivsagar Estate [2002] 257 ITR 59 (SC) clearly applies. We see no "just cause" as would justify departure from the principle. Hence, in our view, the Revenue could not have been allowed to challenge the principle laid down in Lakhanpal National Ltd.'s case [1986] 162 ITR 240 (Guj), which was followed by the Inspecting Assistant Commissioner in the case of the assessee in the three assessment years in question. We are, therefore, of the view that the Commissioner, the Income-tax Appellate Tribunal and the Calcutta High Court erred in permitting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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