There is no dispute on the point of accrual of liability. The assessee admits that the liability accrued during the year. The assessee itself had included the total customs duty provision amounting to Rs.4,59,10,736/ – in the cost of raw material. The fact that the element of customs duty was made part of closing stock, was not considered by the learned Accountant Member. The value of closing stock was increased to that extent. As such it cannot be said that the assessee did make claim of the customs duty for income-tax purposes
8. Sec.43B can only be invoked when the assessee claims deduction for any sum payable by way of tax or duty, under any law for the time being in force, and, as such, where no such deduction is claimed nor charged made to the profit and loss account, there is no question of disallowing the amount. Having regard to the facts, the Assessing Officer was not justified in making the addition under sec.43B.
9. The Id. Accountant Member adumbrated on the fact that the assessee debited the customs duty of Rs.4,59,10,736/ – to purchases account on accrual basis. The fact that the element of the customs duty was made part of closing stock was not considered. The deduction of Rs.3,34,13,072/ – being the amount actually paid before due date for filing of return was allowed by the Assessing Officer as because it was wrongly assumed that sec.43B is applicable. The basic fact that entire amount was not claimed as deduction, was not considered by the Assessing Officer. When the amount is not claimed, there is no question of applying the prescription of sec.43B. As such, I concur with the decision of the learned Judicial Member.
10. The matter will now go before the regular Bench for deciding the appeal in accordance with the opinion of the majority.