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TMI Blog2011 (5) TMI 504X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in upholding the disallowance of Rs. 18,49,950/- being amount claimed by the assessee u/s 43B of the IT Act. 3. In this case Assessing Officer had made a total addition on this issue of Rs. 1,18,49,950/- forming part of claim of Rs. 2,22,34,324/- u/s 43B vide his order dated 25.1.2001. 4. The Ld. Commissioner of Income Tax (Appeals) in her order has sustained the addition of Rs. 1,00,000,000/- but she was silent regarding the balance amount of Rs. 18,49,950/-. The matter travelled to the ITAT and the ITAT vide its order dated 28.10.2003 restored the matter to the files of the Ld. Commissioner of Income Tax (Appeals) only relating to Rs. 18,49,950/-. Accordingly, the issue was considered by the Ld. Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate from CA to support his case. In this regard, ld. counsel of the assessee has placed reliance upon CBDT Circular No. 601 dated 4.6.1991 reported in 190 ITR 4 (St.). This reference was made by the ld. counsel of the assessee in support of the claim that for the purpose of section 43B in case there is difficulty in enclosing necessary challan etc. evidencing payment, a Certificate from a CA, as defined in the Explanation to section 288 of the Act would be sufficient. 6.1 However, we note that in this Circular in para 8 thereof it has clearly mentioned that the same will be sufficient for the purpose of making prima facie adjustments under section 143(1)(a). Further evidence can be called for in cases selected for scrutiny and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. In this case the appeal was earlier heard by the tribunal and necessary order was passed on 28.10.2003. Thereafter, misc. application was filed before the tribunal in MA no. 500/Del/2007. In the misc. application, it was pleaded that the ground relating to deduction of Rs. 1 crore in respect of Excise Duty paid has been omitted to be considered. The tribunal in misc. application has accepted that tribunal had omitted to consider the deduction of Rs. 1 crore which was raised in ground no. 2. It was noted that the tribunal had given a finding only in respect of ground no. 2.1 which is also deduction under section 43B. Accordingly, the order was partially recalled to decide the ground no. 2 raised in the appeal. The said ground no. 2 read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this payment. Considering the above Ld. Commissioner of Income Tax (Appeals) referred to the relevant provision of section 43B and noted that the payment of Rs. 1 crore has been made to the TPIL for depositing the same with the excise authorities. Ld. Commissioner of Income Tax (Appeals) further held that he has perused the records and assessment order of the company and he found that the payment is indeed of capital nature because whenever change in hand of business takes place, it is transferred with all its assets as well as liabilities. The outstanding payment of excise duty was a liability of the company know as TPIL and, therefore, it should form a part of the capital loss/gain of the company to which it has been transferred, hence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim, the company has reimbursed Rs. 100 lacs to TPIL for depositing with excise authorities and has included the same under the head 'Advance recoverable in cash or in kind or for value to be received in 'Schedule' as TPIL has preferred an appeal in the Supreme Court against the said excise order." 12. From the above it is evident that the impugned liability of Rs. 1 crore was on account of capital asset which stands transferred and therefore, it has been rightly held by the authorities below that Rs. 1 crore paid for TPIL statutory liabilities does not represent the business expenditure of the assessee company. Moreover, it is also rightly held that it is in the nature of the capital expenditure as it has its origin in relation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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