TaxTMI 
TaxTMI 
2013 (9) TMI 1239
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....sion for leave encashment and payment in foreign currency respectively. 2.2 As regards first issue, Assessing Officer made addition of ₹ 3,74,78,548/- on account of excise duty paid by the assessee in advance. The Assessing Officer observed that provision of Income Tax Act do not warrant to allow expenses of subsequent year until and unless debited to profit and loss account of the year in which it has been claimed. Such action of the Assessing Officer was challenged by the assessee in first appeal before learned CIT(A), while referring to the provision of section 43B and Delhi High Court's decision in the case of CIT Vs. Modipon Ltd, (334 ITR 106) and DCIT Vs. Glaxo Smithkline Consumer Healthcare Ltd. 299 ITR (AT) 001 has concluded to direct the Assessing Officer to allow the claim of the assessee as per para 6.3 of the order as under:- "6.3 I have carefully considered the submissions of the Assessing Officer and the submissions made by the learned AR of the appellant. The allowability of excise duty paid in advance has been discussed by various courts. The Hon'ble Jurisdictional High Court in the case of CIT Vs. Modipon Ltd. (334 ITR 106) which is a very recent decisio....
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.... considered profit as per profit and loss account. Therefore, the addition on account of advance excise duty while calculating the taxable income clearly amounts to double disallowance by the Assessing Officer since the advance excise duty has not been debited by the assessee in profit and loss account. This fact has also been considered by the Assessing Officer at page 5 of his order. Accordingly, it is a clear mistake on the part of the Assessing Officer and, /therefore, the claim of the assessee in this ground of appeal is allowed. Accordingly, this ground of appeal is allowed in favour of the assessee." 2.4 Aggrieved by this action of learned CIT(A), department has come up in appeal. It was strongly contended that in order to seek relief on account of advance excise duty paid, assessee needs to show the same in the profit and loss account which is found to be not there, therefore, addition was rightly made by the Assessing Officer and CIT(A) was not justified in deleting the same. It was thus, pleaded for reversal of the order of learned CIT(A) and restoring that of the Assessing Officer. 2.5 Learned counsel for the assessee submitted that excise duty paid by the assessee i....
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....e shall pay the duty determined by him for consignment by debit to such account current before removal of the goods. The revenue's contention that the amounts in credit also relate to goods not manufactured, and therefore, not relatable to any "liability incurred" is, in the opinion of this Court, without any basis. The excess credit is likewise adjusted for the next day's clearances. The point to be underlined is that there is no choice, and the amounts relate to the assessee's duty liability, falling within the description u/s 43B; ++section 43B in clear terms provides that the deduction claimed by the assessee in respect of any sum paid by way of tax, duty, cess or fee, shall be allowed only in computing the income referred to in section 28 of that previous year in which it was actually paid, irrespective of the previous year in which the liability was incurred for the payment of such sum as per the method of accounting regularly employed by the assessee. For the purpose of claiming benefit of deduction of the sum paid against the liability of tax, duty, cess, fee, etc., the year of payment is relevant and is only to be taken into account. The year in which the assessee incur....
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....ant by the order of the Hon'ble Kolkata High Court in case of Excide Industries (292 ITR 470). Besides this, my ld. Predecessors have also allowed the claim of the assessee in assessment years 200506 and 2006-07. Therefore, respectfully following the above orders, I hold that the appellant is entitled to the claim of ₹ 2,05,81,518/- towards provision of leave encashment which has been made on the basis of actuarial valuation of the liability. The Assessing Officer is directed to allow the claim of deduction on this ground." 2.9 Aggrieved by this order of learned CIT(A), department has come up in appeal before the Tribunal to plead that Bharat and Earth Mover's decision of the Apex Court is not applicable which interpreted the earlier provision (not applicable now) and so far as the Calcutta High Court case is concerned, which relied this decision, same has been stayed by Hon'ble Supreme Court by relying on written submissions filed in this regard and by filing copy of Hon'ble Supreme Court's order on the point of provision for leave encashment added by the Assessing Officer u/s 43B(f) it was mentioned that Section 43B was instead w.e.f. 01.06.1984 whereas Bharat Earth Mover....
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.... to the various tourism mart and functions held outside India where DTTDC being a member organization participated with the approval of Govt./CA's. All the payment made as stated in the annexure relates to the TA/DA & airfare expenditure etc. incurred by employees of the Corporation who have participated in the mart and tourism fair for Govt. of NCT, Delhi as a member state. In fact, all these payments are not covered u/s 40(ai) and tax auditor has incorrectly reported in its audit report which is only an opinion. Therefore, these should not be disallowed under the said provision of tax law being not covered." b) "This statement relates to the payment made for ₹ 3.48 lacs outside India in foreign currency to the tourist office of Govt. of India for obtaining the promotion in the fair/World Tourism Mart held in other countries. As such none of these are covered for TDS being exempted under the tax law in connection to the payment to the Govt. agencies. These offices are managed under the Min. of Tourism and External Affairs, Govt. of India. For details bills and payment proof, you are requested to allow some more time preferable three to four days to find out from old recor....
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....ernment of India) is ₹ 3,48,571/- and Assessing Officer has taken this amount from the tax audit report and Assessing Officer disallowed the same as assessee was unable to produce any bill/vouchers/details in this regard and since payment was made to the employees so every procedure as prevailing for payment of such amounts to the employees must have been followed, so his claim should be allowed but it was submitted by the learned DR that Assessing Officer has every right to ask for any details or supporting evidence to satisfy himself about genuineness and actual incurring of such expenditure which the assessee has failed to do so. Assessing Officer was justified in making the impugned addition whereas learned CIT(A) is not justified in deleting the impugned addition as made by the Assessing Officer. It was thus pleaded for reversal of the order of learned CIT(A) and restoring that of the Assessing Officer. 2.15 Learned counsel for the assessee relied upon the learned CIT(A)'s order and pleaded that payment of ₹ 19,20,752/- was made to the employees whereas payment of ₹ 3,48,571/- was made to Indian Tourist Office, Government of India and in making payment to t....