TaxTMI 
TaxTMI 
2021 (11) TMI 255
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....earned CIT(A) has erred in deleting the disallowance of Rs. 3,22,561/- which was added by the Assessing Officer with the aid of Section 43B of the Income Tax Act, 1961. 3. In response to the notice of hearing, no one has come present on behalf of the assessee. However, with the assistance of the learned Departmental Representative, we have gone through the record carefully and proceed to dispose of the appeal ex parte qua the assessee. 4. With the assistance of learned Departmental Representative, we have perused the order of the learned CIT(A) which is a well reasoned order exhibiting every details. We deem it appropriate to take note of his findings recorded at paragraph No. 3.3 to 3.5 of impugned order which read as under:- "3.3. I h....
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....enue expenditure in current year. The appellant in its alternate contention has stated that if such expenditure is not allowed allowable expenditure, same may be allowed in earlier assessment year as revenue expenditure. 3.5. Appellant has paid custom duty in earlier assessment years but same was not claimed as revenue expenditure in the year of payment but was shown as "custom duty receivable account" in balance sheet. As above amount is not received from concerned authority as per relevant schemes, such amount is written off as business loss/expenditure in year under consideration. The provisions of Section 43B relied upon by AO are not applicable because payment of custom duty is already made by appellant which is not in dispute. The p....
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....s observed that the aforesaid amount of the Excise Duty was written off at the time of surrender of Excise Registration Certificate. On this issue, the Respected Coordinate Bench Chandigarh in the case of M/s. Mohan Spinning Mills (supra) has opined as under:- "7. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in respect of the deduction claimed on account of CENVAT amounting to Rs. 35,94,577. The assessee was engaged in the business of manufacturing and trading of yarn and fibre. The yarn manufactured by the assessee was an excisable item. The assessee was paying excise duty on the raw material purchased i.e. acrylic yarn/fibre and polyester yarn/fibre. In turn, assessee was liable ....
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....edit remained unadjusted. Once the manufacturing unit of the assessee is closed down, admittedly the benefit of CENVAT credit not availed of against the excise duty payable on manufactured items, cannot be utilized by the assessee and the said write off of CENVAT credit, is allowable as an expenditure in the year under consideration on the closure of the business. The write off of CENVAT credit by the assessee in its books of account is thus allowable as business expenditure under the provisions of section 37(1) of the Act relatable to the year, in which the manufacturing activities are closed down by the assessee. Accordingly, we direct the Assessing Officer to allow the claim of the assessee in respect of write off of CENVAT credit of Rs.....
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....t which is now written off being part of the business expenditure, hence allowable under the provisions of the Act. In the result, we hereby reverse the findings of the authorities below and allow the ground raised by the Assessee." 5. In the light of the above decisions, once on identical facts, a view has already been taken in favour of the assessee on this issue, therefore respectfully following that view, we hereby hold that ld. CIT(A) has rightly allowed the claim. In the result, ground raised by the Revenue is hereby dismissed." Relying upon the decision referred supra and the facts of the case, addition made by AO for Rs. 3,22,561/- pertaining to custom duty is allowed as revenue expenditure." 5. A perusal of the above would ind....