TMI Blog2001 (6) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... in the bonded warehouse on the ground that the duty was payable only on removal of goods from the bonded warehouse. Facts : The petitioner, Hindustan Lever Limited, manufactures and imports raw materials for its manufacturing activities and bonds the same before removal. They pay excise duty and customs duty only at the time when goods are removed from the bonded warehouse. In their accounts for the year ending March 31, 1995, a note was appended stating that the company had not made the provision for excise/customs duty. On November 30, 1995, the company filed its return for the assessment year 1995-96 as well as accounts drawn as on March 31, 1995, and as on December 31, 1994. The company's assessment for the aforestated assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the Assessing Officer issued the impugned notice under section 148 of the Income-tax Act, on March 31, 2000, alleging that the company's income for the assessment year 1995-96 had escaped assessment within the meaning of section 147 of the Income-tax Act. Hence, this petition. Arguments : On behalf of the petitioner, it has been urged that customs and excise duty in the present case became payable by the company only at the time of removal of the goods, from the bonded warehouse. Therefore, as on March 31, 1995, when the accounts were prepared, a note was incorporated in the profit and loss account to the effect that the company has not made any provision for excise and customs duty on stocks lying at the year end in the bonded war ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cate escapement of income from assessment once the company effected payment of duty before the due date, i.e., November 30, 1995. In reply, Mr. Desai, learned senior counsel appearing for the Department, contended that the company had not made a provision for duty on the stock lying at the year end in the bonded warehouse, estimated at Rs. 11.25 crores and, accordingly, the said amount has not been included in the closing stock. He contended that by virtue of non-inclusion of the said amount, the cost of the goods sold by the company is overestimated and by virtue of overestimation of the said cost, the profits are understated. He contended that the duty became payable when the goods were imported. That it was not payable at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticularly when the duty has been paid by November 30, 1995. Conclusion : Before concluding, it may be mentioned that our attention has been invited to the assessment order passed by the same officer for the assessment year 1998-99 where an identical position has taken place. For that assessment year also, the value of the closing stock lying in the bonded warehouse was not increased by the value of duty. The same officer has accepted the contention of the company in the context of section 43B. The same officer has accepted the returns. He has passed an assessment order on that basis. This order is confined to the facts of this case only. For the aforestated reasons, the writ petition stands allowed. The impugned notice dated March 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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