2020 (11) TMI 946 - HC - Income Tax

Appeal Dismissed: Tribunal's Decision on Prior Period Expenses & Excise Fees Deduction Upheld for AY 2002-03.

Commissioner of Income Tax Bangalore, Deputy Commissioner of Income Tax Circle-6 (3), Mumbai-20. Versus M/s. Shaw Wallace Distilleries Ltd.

Commissioner of Income Tax Bangalore, Deputy Commissioner of Income Tax Circle-6 (3), Mumbai-20. Versus M/s. Shaw Wallace Distilleries Ltd. - TMI Issues:1. Prior period expenses claimed by assessee.2. Deduction of claim towards expenditure/liability for excise transport fees.Issue 1: Prior period expenses claimed by assesseeThe appeal pertained to the Assessment Year 2002-03, where the revenue challenged the Tribunal's decision allowing the assessee's claim for prior period expenses amounting to Rs. 2,56,28,132. The revenue contended that the claim was not made in the original return and should have been disallowed. They argued that fresh claims cannot be made without filing a revised return and that all expenses should be reconciled within the accounting period. The revenue further asserted that the Tribunal erred in not remanding the matter back to the assessing authority for consideration. However, the assessee defended the claim, stating that the Tribunal's findings were based on meticulous evidence and not perverse. They emphasized that the entries in the books of accounts are not conclusive, and the crucial aspect is when the expenditure was incurred. The Tribunal, being the final fact-finding authority, had correctly considered the evidence before it. The Court upheld the Tribunal's decision, citing relevant case law and emphasizing that findings of fact can only be interfered with if shown to be perverse.Issue 2: Deduction of claim towards expenditure/liability for excise transport feesThe second issue involved the deduction of a claim for expenditure/liability of Rs. 1,35,73,930 in respect of excise transport fees, which was not originally claimed in the return. The revenue argued that this claim was not a statutory liability under Section 43B of the Act and should not be allowed as a business liability since no actual payment was debited in the books of accounts. They contended that the Tribunal should have called for a remand report from the Assessing Officer. However, the assessee maintained that the Tribunal's decision was based on valid evidence and not challenged as perverse. The Court agreed with the assessee, stating that since the Commissioner of Income Tax (Appeals) had already dealt with the claims on merits, there was no need for remand. The Tribunal's decision was upheld, and both substantial questions of law were answered against the revenue and in favor of the assessee.In conclusion, the High Court dismissed the appeal, upholding the Tribunal's decision regarding the assessee's claims for prior period expenses and deduction of expenditure/liability for excise transport fees for the Assessment Year 2002-03. The Court emphasized the importance of evidence-based findings and the limited scope of interference in matters of fact.