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2017 (10) TMI 315 - AT - Income TaxDisallowance of deduction of excise duty - Held that - As the assessee has itself prayed for a set aside and the learned Departmental Representative also does not have any objection, we deem it fit to restore the issue to the file of the Assessing Officer for a fresh verification and consideration after giving proper opportunity of being heard to the assessee in light of the observations of the order of the ITAT for assessment year 2010-11
Issues:
Dispute over disallowance of deduction of excise duty amounting to ?50 lakh for assessment year 2006-07. Analysis: The appellant contested the disallowance of ?50 lakh excise duty by the ld. CIT(A), which was paid as an advance. The Assessing Officer argued that since the payment was made in advance and not against any liability, it did not fall under section 43B of the IT Act. The appellant claimed that the case was similar to a previous ITAT order for another assessment year and requested restoration to the Assessing Officer for determining the nature of the excise duty demand. The ITAT agreed with the appellant's submission and referred to the previous order, setting aside the issue for fresh consideration by the Assessing Officer. The ITAT cited the previous order concerning a similar issue in the appellant's case for another assessment year. The excise department discovered unaccounted sales, and a demand for excise duty was raised. The Assessing Officer disallowed the sales tax paid and bonus claimed under different sections of the IT Act. The ITAT emphasized the need to differentiate between compensatory and penal nature of the payments and allowed the deduction for compensatory amounts. The case was set aside for the Assessing Officer to re-examine the issue in light of relevant legal provisions and decisions. The ITAT, after hearing both sides, decided to restore the issue to the Assessing Officer for fresh verification and consideration, granting the appellant an opportunity to present their case. The decision was based on the previous order's observations and the need for a detailed examination of the nature of the excise duty demand. The appeal was allowed for statistical purposes, and the order was pronounced in open court on October 4, 2017.
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