TMI Blog2008 (2) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The judgment of the court was delivered by D.A.MEHTA J.- The Income-tax Appellate Tribunal, Ahmedabad Bench 'B' has referred the following question under Section 256(1) of the Income Tax Act, 1961 (the Act) at the instance of the Commissioner of Income-tax: "Whether, the Appellate Tribunal is right in law and on facts in quashing the order passed by Commissioner of Income-tax u/s. 263 of the Act whereby he had directed the Assessing officer to disallow interest of Rs.2,63,658/- payable on excise refund ?" 2. The Assessment Year is 1986-87. Assessment for the assessment year in question came to be framed vide assessment order dated 31.03.1989. The Commissioner of Income-tax, Baroda (the CIT) issued show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered to be a statutory liability which would be allowable only on fulfillment of requirements under Section 43B of the Act. That the interest was payable to the Excise Department in relation to refund of Excise Duty and, therefore, would assume the same characteristic viz. characteristic of Excise Duty. Therefore, the interest payable by the assessee was correctly disallowed under Section 43B of the Act by the CIT under Section 263 of the Act. In support of the submissions made reliance has been placed on decision of this Court in the case of Commissioner of Income-tax Vs. Express Hotel P. Ltd., [2006] 281 ITR 160 (Guj.). 6. As against that Mr. M .J. Shah, learned advocate for the respondent assessee, while supporting the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted interim stay of operation of the order of the Trial Court subject to the condition that the assessee could withdraw the decretal amount of Excise Duty paid up to 15.03.1972 upon furnishing of Bank Guarantee and further condition that the assessee undertakes to pay interest if the appellant succeeds. Finally, when the appeal was decided by the High Court it was held that the assessee was not entitled to claim refund of Excise Duty and hence, vide order dated 06.04.1984 the High Court directed the assessee to refund the Excise Duty withdrawn with 12% interest on the said amount. 8. The assessee carried the matter in appeal before Supreme Court of India by way of a Special Leave Petition to Appeal. While granting Special Leave to Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e entitlement of the assessee to the refund from the Excise Department was because a decree had been made in favour of the assessee by holding that the amount collected as Excise Duty was in fact an illegal collection and did not have any character of duty under the Excise Act. While seeking stay of operation of the order and decree made by the Trial Court Union of India was forced to deposit the decretal sum which was permitted to be withdrawn by the High Court subject to condition as aforesaid. 10. In the aforesaid set of facts and circumstances of the case the interest in question cannot, by any stretch of imagination, be treated as a statutory liability as the principal amount itself was a decretal amount and there was no question o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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