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TMI Blog2002 (2) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... 961, introduced into the statute book on April 1, 1984. The basic scheme of that section is well-known. The scheme is this that even for assessees following the mercantile system of accounting regularly from year to year, deductions in respect of tax liability (roughly speaking), like the liability for payment of Central excise chargeable on manufacture of goods, would be claimable by the assessee only in the assessment for the previous year in which the said tax is actually paid by the assessee. The said section makes it abundantly clear that notwithstanding the liability to pay having arisen in some other earlier previous year, only the year of payment shall be material for the purpose of deduction in assessment. Let us now examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not and cannot get a double benefit. We, however, point out on our part that if Dr. Pal is aggrieved by any decision of a co-ordinate Division Bench of our court, we are unable to redress the grievances of his client and that redressal, if at all, must be had from elsewhere. So far as we are concerned, we would not like to base our decision, as to the above contention of the assessee, on the ground of any double benefit. The accountants of the assessee have been very careful to set out that the balance of Rs.10, being the amount of excise duty and customs duty actually paid but not charged in the profit and loss account, is added to the value of the stock-in-trade. They are very careful at least impliedly, to point out, that whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.100 is only to be allowed in computing the income of the assessment year in question. It cannot be allowed for computing the income of any subsequent or earlier assessment year. In the manner the assessee has chosen to arrange its accounts, the assessee has caused an allowance of Rs.90 only to be made in respect of the assessment year relating to the year of actual payment. If the assessee had stopped there, the Revenue would have no problem. If the assessee wishes to deduct less than it is entitled to, the Revenue would normally gladly welcome such an extra paying assessee. However, such assessees are not to be found in actual practice. What the assessee does here, is not stop at claiming the lesser deduction of Rs.90, but in g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d leave only the transactions on which there have been actual sales in the course of the year showing the profit or loss actually realised on the year's trading." Basing on this argument, Dr. Pal submitted that since the stock-in-trade is not yet sold, the excise duty, which would have been absorbed in it as a liability in an ordinary mercantile system of accounting is being compelled to be taken note of by the assessee, because of the wording of section 43B. According to him, the said section distorts the mercantile system of accounting. We would agree with Dr. Pal that the said section creates a distortion in the pure mercantile system, but we are also of the opinion, that if the statute intends it by clear words, then the court, and ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being Central excise and customs duty under section 43B of the Act on the ground that the said amount has been included in the value of closing stock?" For the assessment year 1986-87 the formulated question is as follows: "Whether, on the facts and in the circumstances of the case and under Explanation 2 to section 43B coming into force with effect from April 1, 1984, the Tribunal was justified in law in directing to allow the amount of Rs.77,81,948 under section 43B of the Income-tax Act, being Central excise and customs duty which had been included in the value of dosing stock?" The Tribunal decided in substance in favour of the assessee in each of the two cases reversing the decision of the Income-tax Officer and Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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