Case Law Details
Parry Phytoremedies Private Limited Vs DCIT (ITAT Pune)
ITAT Pune held that customs duty drawback relating to preceding assessment years can be written-off ‘as prior period item’.
Facts- The grounds raised in the present appeal are in consonance with rule 8 of Income Tax Appellate Tribunal Rules, 1963 [for short “ITAT Rules”], however for the purpose of adjudication, it shall suffice to articulate that, the sole & substantive ground is directed against the disallowance of customs duty drawback written-off relating to preceding assessment years ‘as prior period item’.
Conclusion- In the case of Lord’s Dairy Farm Ltd. v. CIT, it was held that the Court was entitled to presume that the amount became irrecoverable when the assessee wrote it off in its books of account and that, therefore, the assessee was entitled to claim the amount. In our opinion, therefore, even if duty drawback was available for the previous assessment year, what will be relevant was when the same is treated as bad debt by the assessee in his books of account.
Held that we leaving no iota of doubt hold the orders of both the Ld. TAB as contra legem; ergo we set aside the order of Ld. FAA and quash the order of assessment.
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