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TMI Blog2022 (3) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... s duty, excise duty, interest and penalty on payment basis. 3. The brief facts of the case are as follows: The assessee is a company engaged in the manufacture and sale of chemicals. For the assessment year 2008-2009, the return of income was filed declaring 'Nil' income under the normal provisions after setting of brought forward losses. The assessee had declared book profit amounting to Rs. 34,47,91,844 u/s. 115JB of the I.T. Act and paid the tax under the MAT. The return was processed u/s. 143(1) of the I.T. Act and later selected for scrutiny by issuance of notice u/s. 143(2) of the I.T. Act. During the course of assessment, the assessee vide its letter dated 26.10.2010 had claimed a sum of Rs. 6,65,34,829 as deduction u/s. 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority. Before the first appellate authority, it was contended that the issue relating to the levy of import duty by the Customs and Central Excise Authorities was pending in appeal and payment of Rs. 6,65,34,829 was made under protest. It was submitted that the assessee did not charge this amount as expenditure to the profit and loss account, and accordingly, did not claim this expenditure while filing the return of income for the year under consideration. It was contended that during the course of assessment proceedings the assessee made a claim for deduction of the amount before the A.O. vide letter dated 26.10.2010 and the A.O. has erred in not considering the claim of the assessee while passing the assessment order. The CIT(A) reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a sum of Rs. 75,50,000/- paid as penalty, for specific infraction of the Customs and Central Excise law. Therefore, this amount being penalty, in any case cannot be allowed as deduction. Further, it is also found that the payment of the impugned amount has been made by the appellant under protest. Therefore, the amount is definitely a disputed liability and hence it cannot be said. that the liability to pay such amount had arisen during the year under consideration. Accordingly the claim of deduction for the same cannot be sustained. 7.3 It is also relevant to note that the appellant has not charged this amount as expenditure to its P & L account and accordingly, the same amount has not been claimed as expenditure in the return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid under protest on 22.11.2007, customs duty, excise duty, interest and penalty amounting to Rs. 6,65,34,829. The details of payments are as follows:- (i) Customs duty Rs. 1,93,15,875 (ii) Excise duty Rs. 2,82,924 (iii) Interest Rs. 3,93,86,030 (iv) Penalty Rs. 75,50,000 Total Rs. 6,65,34,829 7.1. As mentioned earlier, the turbine generator set was not imported by the assessee, the customs and other statutory charges are the liability of the importer, which goes to the addition of cost of the asset on which depreciation can be claimed. There is nothing on record nor in the lease agreement entered between the assessee and MPCL which suggest that the assessee shall be liable for the statutory dues of import of turbine gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble jurisdictional High Court, the assessee had taken the premises on lease for a period of three years and incurred expenditure on the leasehold premises. The Hon'ble High Court held that the expenses were incurred for conducting the business of the assessee more profitability and more successfully. It was held by the Hon'ble High Court that it is a revenue expenditure and has confirmed the view taken by the Tribunal. In the instant case, the import is of capital asset and that too not by the assessee, hence, the impugned expenditure cannot be equated with the expenditure incurred for improvement of a leasehold property. Therefore, the claim of the assessee has been rightly rejected by the CIT(A). It is ordered accordingly. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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