TMI Blog2004 (8) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of section 41(1) of the Act and observed that the liability in respect of excise duty had not finally ceased - It is evident that in view of the show-cause notice issued by the Assistant Collector dated November 23,1977, the issue of refund to the assessee itself was in dispute and, therefore, it could not be said that there was a final cessation of liability which is a necessary prerequisite for invoking the provisions under section 41(1) – revenue appeal dismissed - - - - - Dated:- 3-8-2004 - Judge(s) : N. K. SUD., ADARSH KUMAR GOEL JUDGMENT The judgment of the court was delivered by N.K. Sud J. - At the instance of the Revenue, the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for short "the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Tariff, thereby attracting Notification No. 206/63, dated November 30, 1963, as amended." The Assistant Collector required the assessee to produce the necessary evidence to establish that the excise duty in question was not leviable on the assessee and indicated his intention that if the assessee did not have any sufficient evidence in support of its claim for refund, the refund already sanctioned would be liable to be recovered under rule 10 of the Central Excise Rules, 1944. The Assessing Officer, however, treated the amount of refund of Rs. 2,14,131 as income under section 41(1) of the Income-tax Act, 1961 (for short "the Act"). Aggrieved by this action, the assessee preferred an appeal before the Commissioner of Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability incurred by the assessee; and (ii) subsequently during any previous year the assessee has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such trading liability by way of remission or cessation thereof. When we apply the above limbs to the instant case, we find there is no dispute about the first part of it. But when we take into consideration the last twelve words, viz., 'in respect of such trading liability by way of remission or cessation thereof, we find that it no more remained a case of cessation of such trading liability the moment the show-cause notice was served on the assessee. If, for a moment, we ignore section 41(1) and go to allowability of an expenditure in respect of which a dema ..... X X X X Extracts X X X X X X X X Extracts X X X X
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