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TMI Blog2014 (9) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal was right in holding that excise duty of Rs. 70,87,357/- shown as payable but not paid can be allowed as an expenditure under Section 43B read with Section 145A of the Income Tax Act, 1961?" 2. The respondent-assessee was engaged in the business of manufacture and sale of sugar. It was also having income from house property. 3. The Assessing Officer disallowed amount of Rs. 70,87,357/- by invoking Section 43B of the Income Tax Act, 1961 (Act, in short), relying upon the audit report wherein, this amount was shown as Excise Duty payable. He observed that similar treatment was given to the excise duty payable in the Assessment Year 2005-06. There is no other discussion and elucidation in the order passed by the Assessing Officer. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. Explanation.-For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment. (b) interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received." Section 145 of the Act obliges every assessee to maintain, subject to accounting standards which may be notified by the Central Government, books of accounts on cash or mercantile basis. Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act. these circumstances, it is not possible to state that under the Excise Act, the duty has become due and payable only by operation of section 3 simplicter. If Section 3 of the Excise Act is considered to be the only charging section and section 4 of the Excise Act is considered as only a provision for assessment, the charge levied by section 3 of the Excise Act cannot be brought home. Section 3 and 4 have to be read together to bring the charge home. The charge is partially embedded in both the provisions". 15. In the present case, the sum of Rs. 69,91,983/- no doubt was unpaid; however, the assessee's contention is not merited, because the goods were admittedly removed, and therefore the duty was payable. The assessee cannot pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "8. Section 145A inserted by the Finance (No. 2) Act, 1998 w.e.f. 1/4/1999 reads thus: 145A. Method of accounting in certain cases-Notwithstanding anything to the contrary contained in Section 145, the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head "Profits and gains of business or profession" shall be-- (a) in accordance with the method of accounting regularly employed by the Assessee, and (b) further adjusted to include the amount of tax, duty, cess or fee (by whatever name called) actually paid or incurred by the Assessee to bring the goods to the place of its location and condition as on the date of valuation. Explanation -For the purposes of this section, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, though the date of manufacture is the relevant date for dutiability, the relevant date for the duty liability is the date on which the goods are cleared. In other words, in respect of excisable goods manufactured and lying in stock, the excise duty liability would get crystallised on the date of clearance of goods and not on the date of manufacture. Therefore, till the date of clearance of the excisable goods the excise duty payable on the said goods does not get crystalised and consequently the Assessee cannot be said to have incurred the excise duty liability. In respect of the excisable goods lying in stock, no liability is determined as payable and consequently, there would be no question of incurring excise duty liability. 12. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns were given to the parties to verify and ascertain facts. However, we do not think, the aforesaid exercise can be safely and under the Statute undertaken by this Court in an appeal under Section 260A of the Act, which relates to substantial questions of law. We have already noticed the facts in the present case that the appellate authorities had simply relied on the order passed by the Tribunal in the Assessment Year 2005-06, which as noticed above, stands reversed by the High Court. Facts are also not clearly brought out in the assessment order. In these circumstances, we deem it appropriate to answer the aforesaid question of law in favour of the Revenue but, with an order of remand, and direct the Tribunal to decide the issue afresh in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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