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TMI Blog1985 (7) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... issue is against the deletion of an addition of Rs. 5,81,537 made by the IAC (Asst.) on account of export duty realised by the assessee company. The assessee realised export duty on Indian made foreign liquor from its customers and the realisations in this year amounted to Rs. 5,81,537. No. payments were made to the Government on the ground that the matter was pending before the Supreme Court and that the stay was granted against payment of export duty. The assessee claimed that this sum was not taxable as income and in case it is decided to include it as part of the income, a simultaneous deductions should be allowed of equal amount because the assessee has to pay this sum to the government. This claim was based on the theory that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT Delhi Bench 'A' in relation to the asst. yr. 1978-79 and the Bench held that this amount was to be deducted as a liability. Following the Tribunal's view, we hold that the CIT (A) justified in deleting this addition of Rs. 5,81,537. This is accordingly confirmed. 3. The next deletion contested relates to the deduction of Rs. 25,000 out of a loss of Rs. 41,908 claimed by the assessee company on the sale of bottles. The assessee claimed a sum of Rs. 41,908 as the loss on sale of bottles. This claim was disallowed, by the IAC on the ground that the loss was not proved. Before the CIT (A) it was shown that this amount represents the loss of bottles and P.P. seals and other shortage materials found short in the stores at the time of takin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of exposure together apart from mishandling is a certainty. The assessee company has taken care to maintain a proper internal check and control over the issue of these bottles and inspite of that certain amount of carelessness in the handling of the these bottles of such a magnitude is possible. Compared to the previous years the loss claimed under this head was a little higher to and to the extent of the disparity the CIT (A) has already made the allowance by maintaining certain disallowance. Since the loss on account of bottles is a normal incident of business and since sufficient allowance has already been made for the possible excess. we think the order of the CIT (A) reasonable and we confirm it. 4. The next objection taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is to be allowed as a revenue expenditure. Here we find that the analyser column was only a part of the distillation plant had that too an integral part of it. The function of analyser column is to analyse the distillation process with the help of which the purity of the end product is to be determined. In such circumstances the function of the analyser column has a vital bearing on the manufacture of the liquor. It has no other function other than analysing the liquor. It is something like a sort of a thermometer measuring the temperature in an industrial unit or it can be likened to a Carburetor in a motor car engine, whose function is to distill the petrol and supply it in a limited quantity but continuously to the engine. The replacemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich are manufacturing alcoholic preparations which are consumable as such and not these concerns which are manufacturing such preparations which could not he consumed as such unless further processed. We now find that this very point has come up for consideration before the Tribunal in the assessee's own case for the asst. yr. 1978-79 and the Tribunal by its order it ITA No. 1232 11/83 had in favour of the assessee and against the Revenue. The Bench pointed out very clearly in that order that what was intended to be denied the benefit of investment allowance was a low priority item like an alcoholic beverage and not industrial alcohol. We are entirely in agreement with this view and following with respect, we hold that the view taken by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the penalty disallowed by the CIT(A) himself, could not be allowed this year. It is an undenied fact that the assessments to sales-tax for these years were made and the relevant demand notice were served on the assessee during the previous year relevant to the assessment year under appeal. Such being the case the liability to pay these amounts accrued to the assessee in the accounting year and under the mercantile system of accounting that the assessee had been following, any amount provided for the discharge of a liability that legally accrued during the accounting year should be allowed as a deduction. These amounts did not only not accrued in the relevant accounting year but they were also paid. There should, therefore, be no diffic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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