ITAT Chennai upholds CIT(A)'s order on excise duty deduction under Section 43B, deems distributor payment taxable.

The ITAT Chennai dismissed the appellant's appeal, upholding the CIT(A)'s order regarding deduction u/s 43B for excise duty paid under protest. The Tribunal affirmed excise duty's allowance on a payment basis under Section 43B and deemed the amount received from the distributor as a taxable trading receipt under Section 41. The appeal was dismissed on August 8, 2019, in Chennai.

---

---

Issues Involved:
Appeal against order of CIT(A) for AY 2012-2013 regarding deduction u/s 43B of the Income Tax Act, 1961 for excise duty paid under protest.

Analysis:

Issue 1: Deduction u/s 43B of the Act
The appellant contested the order of CIT(A) and the Assessing Officer, claiming it was contrary to law, facts, and equity, specifically regarding the deduction u/s 43B for excise duty paid under protest. The appellant argued that the security deposit received from a customer should not reduce the deduction eligible u/s 43B.

Issue 2: Allowability of Disputed Excise Duty
The CIT(A) considered the appellant's claim for deduction of disputed excise duty paid, involving reimbursements from a distributor. The CIT(A) directed the Assessing Officer to set off the amount received from the distributor against the excise duty paid, allowing only the net amount for deduction under the provisions of Section 37 r.w.s 43B of the Act.

Issue 3: Nature of Amount Received from Distributor
The appellant contended that the amount received from the distributor was a deposit, not taxable income. However, the legal position established liability for excise duty on payment basis under Section 43B, and the amount received from the distributor was deemed a trading receipt taxable under Section 41 of the Act.

Judgment Summary:
The ITAT Chennai dismissed the appellant's appeal, upholding the order of the CIT(A) regarding the deduction u/s 43B for excise duty paid under protest. The Tribunal affirmed the legal position that excise duty is allowable on a payment basis under Section 43B, and the amount received from the distributor constituted a taxable trading receipt under Section 41. The appeal was thus dismissed, and the order pronounced on August 8, 2019, at Chennai.

---