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TMI Blog1982 (10) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... to the CIT(A) for decision afresh. It appears that thereafter no decision has been taken till now. One of us, the Judicial Member was a party to that order. So, following that order the impugned appellate order to that extent is restored to the CIT(A) for decision afresh. 3. (2) Excise Duty liability of Rs. 63,19,171 The assessee has factories in the States of Kerala and Tamil Nadu and Union Territory of Goa. The Excise Authorities want to compute the quantum of excise duty on the net billing price. The stand of the assessee is that the duty could be levied only on the aggregate to manufacturing cost and manufactures profit and not on the sale price as contended by the excise department. If the stand of the excise department is to prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y because the departmental appeal is pending before the Supreme Court. The ITO stated that this can be considered only as a contingent liability which will become an ascertained liability if and only if the Supreme Court allows the appeal filed by the Central excise department against the judgment of the Kerala High Court and that, therefore, the sum of Rs. 63,19,171 will not be allowed as a deduction against the business income relating to this assessment year and that the same will be allowed in the year in which it may become payable if the Supreme Court allows the appeal filed by the Central excise department. The CIT(A) agreed with the ITO. Hence further appeal by the assessee. 5. Kerala Rs. 12,68,175. The assessee follows mercantile ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, if those orders are cancelled later it is only a case of cessation of liability u/s 41(1) of the IT, Act and, therefore, it should be allowed as a deduction in the relevant accounting year we cannot agree. It may be that if there was no such High Court judgment, this amount might have been allowed as a deduction in the relevant accounting year itself. But the ITO can take note of subsequent events. By the time the assessment was made the High Court judgment had been delivered. The order of the excise authority fastening the liability had been cancelled. So the ITO can hold that there is no liability created by the excise department orders. So, in the light of the High Court judgment, we are of the view that the ITO was right wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court judgment and the method of computation adopted by the Central excise department is accepted as correct, then this amount of Rs. 12,68,175 shall be allowed as a deduction in this year itself by appropriate proceedings without any limitation as to the period of time. 8. Madras Rs. 19,79,376 As regards this amount, there is no liability at all in the relevant accounting year. The excise department had not passed any order like the one passed in Kerala Range. The Asstt. Collector, Madras passed the order only on 24th January 1978. So in this year there is no liability particularly when the Asstt. Collector, Madras by letter dt. 1st October 1975 addressed to the assessee, states that to ensure that clearances are not held up and no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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