9911796707
TMI Blog2013 (11) TMI 1480X X X X Extracts X X X X X X X X Extracts X X X X ..... of excess provision of Rs. 70,99,758/-. 3. The facts relating to the issues are stated in brief. The original assessment in the hands of the assessee was completed u/s. 143(3) of the Act on 26-12-2006 accepting the returned income of Rs. 26,54,364/-. Subsequently, the assessment was re-opened u/s. 147 of the Act on the following reasons: "In this case the assessment u/s. 143(3) was completed on 26-12-2006 on a total loss of Rs.26,54,364/-. A perusal of the records show that the assessee has reduced from the gross sales Rs.2,28,41,940/-, being the excise duty collected, resulting into net sale of Rs.29,18,66,773/-. At the same time, the assessee has debited Rs.70,99,758/- as excise duty paid. Having debited the excise duty paid, there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eding assessment year. i.e. AY 2005-06. Since the provisions of sec. 43B shall apply to such expenditure which is otherwise allowable, the AO took the view that the excise duty amount of Rs. 70,99,758/- pertaining to the succeeding year, cannot be allowed u/s. 43B of the Act. Accordingly, the Assessing Officer disallowed the sum of Rs.70,99,758/- stated above. 5. In the appeal filed by the assessee, the Ld. CIT(A) accepted the contentions of the assessee. However, the Ld. CIT(A) confirmed the addition made by the Assessing Officer on the reasoning that he did not find the amount of Rs.70,99,758/- as a Provision in the Balance sheet as on 31-03-2004. The relevant observations made by the Ld. CIT(A) are extracted below: "5. I have gone thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to conclude that excise duty as appearing in the P&L account cannot be allowed because the assessee was showing sales net of excise duty." Aggrieved by the order of the Ld. CIT(A) , the assessee has filed this appeal before us. 6. The Ld. Counsel for the assessee submitted that the Assessing Officer was not right in comparing the amount of excise duty which was reduced from gross sales and the amount of excise duty which was provided for in the profit and loss account. He submitted that the excise duty collected from the customers in the sales bill was originally included in the gross sales. For the purpose of showing net sales, the assessee has deducted the excise duty from the sales amount in the profit and loss account. The excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. He further submitted that the Ld. CIT(A) was not correct in observing that the provision for excise duty was not shown in the balance sheet. The Ld. Counsel submitted that the outstanding liability was shown at Rs.117.83 lakhs under the head 'Current liabilities' in the Balance Sheet as at 31.3.2004. The break-up details of outstanding liabilities, inter alia, includes the Central excise duty of Rs.70,99,758/- provided for by the assessee. Accordingly he submitted that the disallowance made by the Assessing Officer is not correct and the same is liable to be deleted. 7. On the contrary, the Ld D.R submitted strongly supported the order passed by Ld CIT(A). 8. We have heard the rival contentions on this issue and perused the record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance Sheet. In support of the said submission, the Ld A.R also filed break-up details of outstanding liabilities and we notice from the said details that the amount of Rs.70,99,758/- is shown as an item of "Outstanding liabilities". The Balance sheet is prepared by the assessee by grouping various accounts of identical nature and hence, in our view, the Ld CIT(A) could have verified this fact by eliciting the details from the assessee, instead of rejecting the contentions of the assessee without calling for explanations. In any case, the case of the AO was that the impugned Excise duty amount relates to the succeeding year and accordingly he has disallowed the amount claimed by the assessee. 10. The fact remains that the assessee has incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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