9911796707
TMI Blog2017 (10) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... he case are that for the year under consideration, the assessee company filed the return of income declaring income of Rs. 1,05,429/-. The AO noticed that the assessee had paid excise duty of Rs. 50,00,000/- during the year under consideration. He, therefore, asked to file details of excise duty paid amounting to Rs. 50,00,000/-, reasons for its payment and order of excise department if any. The assessee filed copy of the order No. A-558/CF/07/SC/(PB) dated 31.01.2007 of Settlement Commission, Customs & Excise, admitting the case which revealed that there was a search operation conducted by the Central Excise department on 27.2.2006. Excise Department found on physical verification of the stock in the factory of the assessee that goods valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005-06 with the condition that the department will not reopen the case for 2004-05 and 2005-06 and no penal action will be initiated. The assessee also submitted a chart of year wise sales made along with his letter dated 22.12.2008. The details of sales turnover and comparative profit and loss account fall in different assessment years. The AO did not accept the conditional surrender. The AO observed that under I.T. Act, income is to be taxed on yearly basis and not on consolidated basis as recorded by the assessee. The AO issued a show cause u/s 145(3) for rejection of the books of accounts. In response to the same, the assessee filed letter dated 30.12.2008 retreating the conditional surrender of Rs. 35 lacs. On the basis of information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 wherein the ITAT had set aside identical issue to the file of the Assessing Officer for the purpose of determining as to what portion of excise duty demand was penal in nature and what portion was compensatory in nature. Ld. Authorised Representative submitted that the case may be restored to the file of the Assessing Officer for similar purposes in this year also. 5. Ld. DR had no objection to the issue being restored to the file of the Assessing Officer. 6. We have heard the rival submissions and carefully perused the relevant material placed on record. We find that the ITAT Delhi Bench in I.T.A. No. 5895/Del/2014 for Assessment Year 2010-11 in assessee's own case vide order dated 30.12.2016 had considered an identical issue and had t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure (not being expenditure of the nature described in sections 30 to 36 not being in the nature of capital expenditure of personal expenses of the assessee), laid out of expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head "profit and gains of business or profession."" Explanation: for the removal of doubts, it is hereby declared that any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction of allowance shall be made in respect of such expenditure." 4.1. The authorities below were of the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efuse to give deduction to that The contention of the assessee in the present case before us, remained that the entire amount except Rs. 1,87,126/- is compensatory in nature and only Rs. 1,87,126/- was penal in nature. The assessee has also tried to support its claim by referring the order of Income Tax Settlement Commission wherein offer of the assessee company has been accepted. Reference of CBDT's circular no. 772 dated 23.12.1998 also been given. Several decisions have also been cited by the Ld. AR to support it contention that payment of sales tax demanded on unaccounted sales was compensatory in nature and thus was an allowable deduction u/s 43B of the Act. Having gone through these decisions as well as the decisions of Hon'ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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