Case Law Details
During the period relevant to the assessment year, the respondent assessee had received Rs.42,05,173/- from the Excise Department as refund of excise duty paid. The Assessing Officer included this amount in the profit and loss account and accordingly computed the taxable income. The aforesaid addition was deleted by the CIT(Appeals) and the said order has been affirmed by the impugned order passed by the Income Tax Appellate Tribunal (tribunal, for short) dated 31st May, 2004. The ground given by the tribunal for deleting the said addition is that the Excise Department had appealed against the judgment passed by the learned single Judge of this Court pursuant to which refund of Rs.42,05,173/- was granted. The tribunal has held that on the date when the Assessing Officer had made the said addition, the matter was still subjudice before the appellate forum and, therefore, there was no cessation or remission of liability in absolute terms.
High Court held that as it was not a case of actual payment, i.e., expenditure but only a provision was made in the books of accounts in respect of the excise duty payable while disputing the liability to pay the duty. Therefore, it was a case of the trading liability and the question of cessation or remission of liability was relevant and material for deciding whether or not Section 41(1) of the Act is applicable. We have noticed the said distinction above.
HIGH COURT OF DELHI
+ ITA 152/2005
COMMISSIONER OF INCOME TAX
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