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TMI Blog2002 (7) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... d when the reopening of the assessment is bad, there is no need to go into the merits whether the tax was allowable on the basis of furnishing of a bank guarantee, therefore, we find no reason to interfere in the assessment years 1984-85 and 1985-86. So far as the assessment year 1987-88 is concerned, reopening has been held valid and we found that the furnishing of a bank guarantee is not tantamount to actual payment of the customs duty as required under section 43B, therefore, that has been hit by the provisions of section 43B of the Act, 1961, and the Tribunal has committed error in allowing the deduction of customs duty liability on the basis of a bank guarantee furnished by the assessee. - - - - - Dated:- 18-7-2002 - Judge(s) : Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer disallowed the claim of the assessee for deduction of customs duty liability. The Assessing Officer held that the assessee is not entitled for any deduction in the absence of actual payment of the customs duty as that is hit by the provisions of section 43B of the Income-tax Act, 1961. In appeal before the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax (Appeals) has confirmed the view taken by the Assessing Officer. In appeal before the Tribunal, the Tribunal took the view that as material facts were disclosed for taxing the customs duty liability, therefore, the Assessing Officer was not justified in reopening of the assessment under section 147 read with section 148 of the Income-tax Act, 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year." Learned counsel for the assessee brought to our notice that on a query by the Assessing Officer regarding customs duty liability, the assessee, vide its letter dated December 8, 1986, submitted a reply including the reply regarding customs duty liability, which reads as under "Customs duty payable: Against newsprint imported, the liability was provided, writ was filed by the company and also by other newspapers in the Supreme Court of India, for relief in rate of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction on account of customs duty liability and thereafter the Assessing Officer has allowed it, may be by mistake, he cannot tax that income after reopening on the ground that the assessee has not disclosed fully and truly material facts particularly when the assessee has categorically explained that he is claiming this amount on the basis of furnishing the bank guarantee in spite of section 43B. If the Income tax Officer allowed in the original assessment, he cannot reopen the assessment on change of opinion on the same material, which was before him at the time of the original assessment, therefore, in our view reopening of the assessment under section 147 for the assessment years 1984-85 and 1985-86 is bad in law. For the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms and conditions of the agreement governing such loan, shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him:" The provisions of section 43B start with a non obstante clause. The words used that in spite of the method of accounting regularly employed by the assessee in computing the income referred to in section 28 of the previous year, deduction will be allowed in which such sum is actually paid by him, the words used are "actually paid". By no stretch of imagination can it be said th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the court or even the assessee. It is true that in the case of the Supreme Court, which has been referred to by Mr. Ranka, learned counsel for the assessee, their Lordships held that a circular has binding effect, but the issue before the Supreme Court relates to the circular, which interprets the statute for the uniformity of the decisions in the Department. But the circular before us is as to whether the appeal is to be filed or not? These are administrative instructions and in spite of these administrative instructions if the department prefers to file an appeal or make a reference to this court, in our view on such administrative instructions the appeal of the Department should not be dismissed or the reference should not be reject ..... X X X X Extracts X X X X X X X X Extracts X X X X
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