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TMI Blog1990 (10) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... t all assessable would fall in asst. year 1986-87 as the proceedings had been dropped by the Collector(Appeals) on 1st February, 1985 which is relevant to the assessment year 1986-87, accounting period of the appellant being Diwali year. For the year in appeal the accounting period ends on4th November, 1983. 2. It was also claimed before the Assessing Officer that the amount had not been claimed and allowed as a deduction in computing the income in any year and accordingly the amount of refund could not be assessed to tax under section 41 of the Income-tax Act, 1961. 3. The Assessing Officer repelled the contentions of the assessee by holding that the amount on account of excise duty had been collected by the assessee from the customers and accordingly it constitutes trading receipt. Since the amount had been paid to the Government the liability was thus allowed as a deduction in computing the income of the assessee during the relevant assessment years. The Assessing Officer held that it is not necessary for the assessee to claim the deduction or make entries in the books of accounts. According to the Assessing Officer fact remains that a deduction on account of excise duty col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-opening the case. Further appeal for review was also dismissed by the Collector(Appeals),New Delhion1-2-1985. On these facts the learned counsel vehemently argued that till1-2-1985the refund granted by the Central Excise Department had not become final and accordingly the remission of liability was not complete till that date. According to the learned counsel the amount of refund could be assessed, subject to other conditions being satisfied, in the year in which the dispute was finally decided in favour of the assessee. 6. The learned counsel further contended that in order to attract the provisions of section 41 it is necessary for the revenue to establish that deduction had been claimed by the assessee and was allowed by the revenue in any year. In this case there is nothing on record to show that the amount of excise duty collected from customers had been claimed by the assessee as a deduction and was allowed as such. Moreover during the year in appeal the refund granted to the assessee had not become final and the Government had sought to review the order of refund and it was only on1-2-1985that the proceedings for re-opening of the refund case had culminated. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned D.R. contended that the amount is assessable in the year of receipt. The learned D.R. cited the decision of the Gujarat High Court in the case of CIT v. Rashmi Trading [1976] 103 ITR 312 wherein it has been held that u/s 41 of the Income-tax Act, the amount is assessable in the year of receipt. It was accordingly urged that the appeal of the assessee may be dismissed and the order of the revenue authorities upheld. 10. We have given our careful consideration to the rival contentions. The issues involved in this case are two-fold. Firstly, it is to be determined as to whether any deduction or allowance had been made in any year in respect of excise duty of Rs. 98,607. The second question for our consideration is as to whether the amount is assessable in this year or in any other asst. year. For the sake of convenience we would consider the issue relating to the year of assessability before the issue as to whether any allowance or deduction has been allowed in any year in the case of assessee in respect of excise duty of Rs. 98,607. 11. We may quote relevant portion of Section 41 for the sake of ready reference : " Whether an allowance or deduction has been made in the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous year relevant to asst. year in appeal. The show-cause notice issued subsequently for re-opening the order of the Appellate Collector and for recovering the refund granted to the assessee would also not cloud the issue. The fact remains that the amount of refund granted to the assessee was never collected back nor was the refund order granted by the concerned authority cancelled by any superior authority. Since the refund had been received by the assessee during the year in appeal, any attempt for reviewing the earlier order which ultimately did not succeed would not, in our view, come in the way of assessment of the amount of refund in the year of receipt. Therefore, we hold that u/s 41 the amount of remission or refund received by the assessee would be assessable in the year of receipt. It may be pertinent to mention that the assessee has not disclosed this amount for assessment in any year. 13. Now we shall consider the next issue as to whether deduction of allowance had been allowed to the assessee in respect of refund of Rs. 98,607 in any year. The fact that the amount of excise duty paid by the assessee has been recovered from the customer, has never been disputed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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