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TMI Blog2014 (6) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... ons stipulated in section 36(1)(v) stood satisfied - assessee had made the payment to the LIC and the payments were made before the filing of the Income Tax Return – thus, the claim of the assessee is allowable – Decided in favour of Assessee. Accordingly, we set aside the order of the AO and decide the issue in favor of the assessee. Difference in the balance of one of the parties – Held that:- The AO has not given any opportunity to the assessee to file the reconciliation and the reconciliation filed before the DRP was not examined – thus, the matter is required to be remitted back to the AO for adjudication – Decided in favour of Assessee. Disallowance u/s 43B of the Act - Unutilised Modvat Credit Outstanding at the end of the year – Held that:- Following Eicher Motors Ltd. vs. Union of India [1999 (1) TMI 34 - SUPREME COURT OF INDIA] - the set off of excise duty against Modvat credit available to the assessee is to be treated as payment of excise duty at the time of set off – the amount of excise duty adjusted against the Modvat available before the due date of filing of income tax return has to be treated as payment made u/s. 43B and the same is allowable – thus, the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... running royalty is on revenue account. Therefore, in view of the Hon ble Delhi High Court judgment in assessee s own case the necessity of royalty cannot be questioned or doubted. 5.12 Besides similar issue of royalty payment is decided in favor of the assessee is decided by the ITAT in the case of Lumax Industries Ltd. 2013-TII-123-ITAT-Del-TP holding that: Payment of royalty was being claimed and allowed right from 1984 to Assessment Year 2003-04, as business expenditure of the assessee and new circumstance has been pointed out by either of the authorities below to hold that in the years thereafter, the benefit accrued to the assessee by the payment of such royalty has dried up; 5.13 Our aforesaid view is fortified by the aforesaid judgment of Lumax Industries (Supra). Since the royalty was being paid from 1997 and was continuously examined by the AO, then in the absence of any new facts to hold that there was no need to pay the royalty was uncalled for. 5.14 After hearing the parties and on perusal of the record in our considered view no interference is called for in the order passed by the CIT(A) on this issue and the appeal of the Revenue for A.Y. 2005-06 is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07 is that addition of Rs. 77,789/- on account of alleged difference in the balance of one of the parties is bad in law. On this issue AO noted that assessee company was asked to provide balance confirmation from the creditors. In the credit balance confirmation provided by one party M/s Sanden Vikas India Ltd., there was a difference of Rs. 77,789/-. AO held that the assessee has not offered any reconciliation /clarification about the same and hence, the same amount was added to the income of the assessee. On this issue it is the submission of the assessee that AO never gave an opportunity to the assessee to reconcile. The reconciliation in this regard was duly submitted before the DRP, but the DRP did not look into the reconciliation. It has been submitted that the difference was due to bonafide reasons that certain claims and invoices were raised, which were accounted for by the assessee, but were not been accounted for by the party. 4.1 We have heard both the counsel and perused the records. We find that the AO has not given any opportunity to the assessee to file the reconciliation and the reconciliation filed before the DRP was not examined. Hence, we deem it appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued any cheque or made any payment in cash in respect of the said amount in the following years. 5.3 Now we find that this disallowance by the Assessing Officer is not tenable in view of the decision of the Hon ble Apex Court in the case of Eicher Motors Ltd. vs. Union of India (Supra). In this case it was held that the set off of excise duty against Modvat credit available to the assessee is to be treated as payment of excise duty at the time of set off. Similar view has been expressed in other case laws submitted above. 5.4 Hence, principally we are in agreement with the proposition that amount of excise duty adjusted against the Modvat available before the due date of filing of income tax return has to be treated as payment made u/s. 43B and the same is allowable. Hence, we remit this issue to the file of the AO. The Assessing Officer shall examine the adjustments of excise duty with the Modvat credit available and accordingly allow the assessee s claim, as per the exposition arising out of the Hon ble Apex Court decision as above. In the result, this issue is allowed for statistical purposes. 6. Another common issue raised is that the addition of Rs. 21,48,535/- u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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