TMI Blog2018 (8) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... tt(174) ORAL ORDER ( PER : HONOURABLE MR.JUSTICE M.R. SHAH) 1. Feeling aggrieved and dissatisfied with the impugned order passed by the learned ITAT dated 04.01.2017 passed in IAT No.939/Ahd/2002 for Assessment Year 1996-97, by which the learned Tribunal has dismissed the said appeal preferred by the Revenue, the Revenue has preferred the present Tax Appeal with the following proposed questions of law:- [ A] Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of ₹ 55,73,818/- made on account of opening stock? [ B] Whether the Appellate Tribunal has erred in law and on facts in deleting the addition of ₹ 9,88,740/- made on account of disallowance in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Tribunal. No substantial question of law arises. 4. Now so far as proposed Question No.2[B] is concerned, it is with respect to deleting addition of ₹ 9,88,740/- made on account of disallowance in respect of provisions of interest liability of central excise refund. It is required to be noted that and as rightly observed by the learned Tribunal in para-51 that though the liability got settled during the year under consideration in view of the High Court s order and as the assessee followed mercantile system of accounting, the liability accrued during the year and its payment at future date cannot result in disallowance. Considering the above, the learned Tribunal has rightly deleted the aforesaid addition of ₹ 9,88, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of India Cements Ltd. Vs. Commissioner of Income Tax, Madras , reported in (1966) 60 ITR, 52. The only contention on behalf of the Revenue was that in the books of accounts, the assessee treated the said expenses as capital expenses. However, as per the catena of decisions, effect given by the assessee in the books of accounts cannot be a determinative factor. What is required to be considered is whether in law, the said amount is to be treated as capital expenditure or the revenue expenditure. As per the decision of the Hon ble Supreme Court in the case of India Cements Ltd. (supra), the expenditure incurred on the issue of debenture is allowable expenditure and to be treated as the revenue expenditure. Under the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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