Any tax/duty paid in later year can be capitalized in the year in which obligation to pay arose

Brief fact of the case

The respondent assessee was a hospital and diagnostic centre earning income under the head ‘Business & Profession’. During 1988-89 and 1992-93, it imported hospital equipment valued at Rs.27511988/- without payment of custom duty on the basis of a custom duty exemption certificate (CDEC) issued by the Director General of Health Service (DGHS). This imported equipment was capitalized on the actual value of the equipment paid and depreciation was claimed thereon from year to year a

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