2003 (8) TMI 28

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....the assessee filed a return disclosing an income of Rs. 14,930. The said return was processed under section 143(1)(a) of the Act on February 15, 1991. There was a search in the business premises of the assessee on April 28, 1988, by the Central Excise Department and gold ornaments weighing 1,379.500 gms. and one piece of melted gold weighing 114.850 gms. were seized. Based on these materials, the Assessing Officer had issued a notice under section 148 of the Act on January 8, 1992, and the assessee filed a return on March 30, 1992, pursuant thereto. In the said assessment proceedings, the assessee claimed deduction of a total sum of Rs. 1,95,000 (Rs. 1,50,000 towards redemption fine and Rs. 45,000 towards penalty) under section 37 of the Ac....

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....sum of Rs. 1,50,000 by way of redemption fine and Rs. 45,000 by way of penalty with reference to the relevant provisions of the Central Excise Act and the Rules. Standing counsel submits that it is not the nomenclature which is given to the payment that matters, but the essential nature of the payment with reference to the statutory provisions- Standing counsel, in support of the said contention, has relied on the decision of the Supreme Court in Swedeshi Cotton Mills Co. Ltd. v. CIT [1998] 233 ITR 199. Standing counsel further submitted that the question referred in this case is squarely covered by the decision of the Supreme Court in Haji Aziz and Abdul Shakoor Bros. v. CIT [1961] 41 ITR 350 in favour of the Revenue and against the assess....

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....vent the infliction of any other punishment to which the person affected thereby is liable under the provisions of this Act or under any other law." We, find that neither the assessing authority nor the two appellate authorities had made any effort to ascertain the nature of the payment and the consequences provided therefor in the Act and the Rules. The question as to whether the redemption fine paid under the provisions of section 34 of the Act can be treated as one for infraction of law is also a relevant matter to be considered, that too with reference to the provisions of section 34A also. In fact the Supreme Court in Swedeshi Cotton Mills' case [1998] 233 ITR 199 has clearly observed that whenever any statutory impost paid by an as....