2013 (1) TMI 968

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.... allowing the excise duty written-off of Rs. 65,24,121/-, disallowed by the AO treating the same as wrong claim. 2. Facts in brief as emerged from the corresponding assessment order passed u/s.143(3) r.w.s. 147 dated 22.12.2009 were that the assesseecompany is following the 'Mercantile" system of accounting. It was noted by the Assessing Officer that for the year under consideration an amount of Rs. 65,24,121/- was written off by debiting the profit & loss account pertaining to Excise Duty. According to him, Government had declared the scheme wherein the assessee has been given an option to continue with the present rate of Excise Duty or to avail a route of exemption. After going through the submissions of the assessee, the Assessing Of....

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....ect of the raw materials and thus, the claim of the appellant is undoubtedly wholly and exclusively for the purpose of its business pertaining to the year under consideration and hence, fully satisfies the conditions as laid down in section 37 of the IT Act. The argument of the AO that the impugned deduction is allowable against the future expenses has no force since the assessee has already surrendered its license under the Excise Act and opted for the exemption route and hence, there is no question of setting off the said expenditure in future. Further, the same view has also been taken in the cases of ACIT Vs. Naffar Chandra Jute Mills Ltd. (2004) 90 TTJ (Cal) 934, Honda Seil Power Products Ltd. Vs. DCIT (2000) 69 TTJ (Del) 97 and DCIT V....

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....ed i.e. acrylic yarn/fibre and polyester yarn/fibre. In turn, assessee was liable to pay duty on its manufactured items. The rate of excise duty payable on the raw material was higher and the assessee was depositing the excise duty in PLA account which in turn was adjustable against the excise duty payable on the finished products. The excise duty payable on the finished products was on the lower side and consequently over the period of years the assessee had credit of excise duty resulting in accumulation of CENVAT." "10. Various tests have been laid down by various High Courts and the Apex Court in relation to the allowability of expenditure under section 37(1) of the Act while computing the income from profits and gains of busin....

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....fficer to allow the claim of the assessee in respect of write off of CENVAT credit of Rs. 35,94,577/-. Ground No.1 raised by the assessee is thus allowed." 4.1. We have also noted that Respected Coordinate Bench "A" Ahmedabad in the case of Girdhar Fibres Pvt.Ltd. (supra) has also opined as under:- "9. We heard both the sides. Before us, Form E.R.1, i.e. Return of Excisable goods and availment of CENVAT credit has been placed. The explanation of the assessee was that the impugned two amounts were part of the duty which was paid by the assessee at the time of purchase of raw-material, however, the assessee had maintained exclusive system of accounting, therefore the duty paid was not debited as a part of the purchases but a separ....