2021 (7) TMI 1453 - HC - Income Tax

Double deduction of excise duty on closing stock - Claim made once in profit and loss and account and further deduction in computation of total income - substantial question of law or fact? - HELD THAT - An identical question was framed for consideration of this Court 2019 (6) TMI 1723 - CALCUTTA HIGH COURT rejected the appeal at the admission stage opining that the question referred to above is not a substantial question of law. Further in ITC LIMITED 2019 (11) TMI 1825 - CALCUTTA HIGH COURT the identical question of law was framed along with other questions of law. The appeal was admitted by a coordinate Bench by an order on the other questions of law but not on the question of law which has been framed in the present appeal. In view of the aforesaid, we are unable to admit this appeal.

Summary

Issues Involved:
- Substantial question of law regarding double deduction of excise duty on closing stock in the computation of total income for Assessment Year 2005-2006.

Analysis:
The High Court of Calcutta, comprising Justice Arijit Banerjee and Justice Arindam Mukherjee, considered an appeal where the Appellant raised a substantial question of law. The question pertained to whether the Income Tax Appellate Tribunal erred in deciding the appeal in favor of the Assessee despite the Assessee claiming double deduction of excise duty on closing stock in the amount of Rs. 270,06,83,951. The Appellant contended that such double deduction was not in accordance with Accounting Standard-2 and its guidance note. The Court noted that a similar question had been previously considered in another appeal against an order of the Income Tax Tribunal, where a coordinate Bench rejected the appeal, stating that the question was not substantial. Additionally, in a separate appeal, the Court admitted the appeal on other questions of law but not on the specific question raised in the present appeal. Consequently, the Court held that based on the previous decisions and the lack of new arguments or grounds, they were unable to admit the current appeal. Therefore, the appeal and the application were dismissed by the Court.

This judgment highlights the importance of presenting substantial questions of law that are distinct and not previously considered by the Court. It underscores the significance of adherence to accounting standards in tax matters, specifically regarding the deduction of excise duty on closing stock. The decision also emphasizes the need for parties to bring forth new arguments or grounds to warrant the admission of an appeal. Overall, the judgment serves as a reminder of the judicial scrutiny applied to questions of law in tax appeals and the requirement for legal arguments to meet the threshold of substantiality for consideration by the Court.