2016 (6) TMI 982

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....AKIL KURESHI) Revenue is in Appeal against the judgment of the Income-Tax Appellate Tribunal raising following questions for our consideration: "1. Whether on the facts and circumstances of the case and in law, the Tribunal was justified in allowing deduction of Rs. 3,71,42,093/- under section 43B on account of adjustment of refund from Central Excise and Customs without interpreting the pro....

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....xcise Department. As against this, the department had raised a demand of Rs. 4.50 crores and adjusted assessee's refund claim of Rs. 3.71 crores against such demand. It was in this background that the assessee had claimed deduction of Rs. 3.71 crores on actual payment basis. The Revenue contends that such claim would be hit by section 43B of the Income-tax Act, 1961. 3. The CIT(Appeals) fou....

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.... finding was given that assessee was entitled to the said deduction under section 43B of the Act on the payment basis and further held that the demand raised was not on account of penalty as claimed by the A.O. But was a routine demand. We are in full agreement with CIT(A) on this point. The assessee has also given note in the "notes to accounts" to the annual account mentioning the facts qua the ....

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....urred. The Court also refered to the decision of Kedarnath Jute to hold that irrespective of the fact that the liability was not accounted for in the books, it was deductible under mercantile system of accounting when liability has accrued. Therefore, once the company makes the payment, whether under protest or otherwise, by debiting Profit and Loss account or by showing in the Balance Sheet or as....