Interest on excise duty refund not disallowable under Section 43-B where identical controversy was already decided between the same parties.

Interest paid on excise duty refund was held not to be a disallowable expenditure under Section 43-B of the Income-tax Act, 1961, where the assessment year was already covered by an earlier decision between the same parties on an identical controversy. The Tribunal's view that the amount could not be disallowed was upheld, and the reference was answered in the negative. The assessee accordingly succeeded on the stated issue.

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Issues: Whether the disallowance of Rs. 2,63,658 towards interest payment on excise duty refund could be sustained under Section 43-B of the Income-tax Act, 1961.

Analysis: The assessment year was covered by an earlier decision between the same parties involving an identical controversy. Following that earlier ruling, the Tribunal's view that the amount was not a disallowable item was upheld, and the question referred was answered in the negative.

Conclusion: The disallowance was not sustainable under Section 43-B of the Income-tax Act, 1961, and the assessee succeeded.

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