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TMI Blog1990 (3) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for the assessment year 1973-74 ?" In this proceeding, the assessment year involved is 1973-74 for which the corresponding year of account is the year ended on December 31, 1972. The facts found by the Tribunal as narrated in the statement of case are as under: "The assessee-company claimed deduction of a total amount of Rs. 17,61,161 representing central excise duty payable by the company on manufacturing of tea in respect of the following calendar years : Rs. 1968 1,08,500 1969 7,34,911 1970 6,09,150 1971 2,56,600 1972 52,000 ----------------- 17,61,161 ----------------- The aforesaid duty was debited by the assessee-company in the respective calendar years for which the accounts were drawn up and the clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and civil suits filed by the assessee as also the claim preferred with the insurance company were still pending decision. The assessee claimed before the Income-tax Officer that the amount of Rs. 17,61,161 paid by it to the Central Excise authorities be allowed as a deduction of business loss incurred by the assessee-company during the calendar year 1972 relevant to the assessment year 1973-74. The Income-tax Officer rejected the assessee's claim. On appeal, the Commissioner of Income-tax (Appeals) allowed the assessee's claim and directed the Income-tax Officer to allow deduction of the entire amount of Rs. 17,61,161 in recomputing the income of the assessee-company for the assessment year 1973-74." On further appeal, the Tribunal held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y with regard to the alleged earlier payments, if any, the Income-tax Officer would be entitled to bring the said amount of recovery to tax in terms of sub-section (1) of section 41 of the Act because the said amount would be on account of liability which had already been debited in the books of account of the assessee and which was not enforceable by the Customs authorities on account of double payment thereof. The learned Commissioner of Income-tax (Appeals) has already made the above position clear and, in our opinion, that observation of the Commissioner of Income-tax (Appeals) is in accordance with law. The claim of the assessee in the circumstances was rightly allowed by him. The order of the Commissioner of Income-tax (Appeals) being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law, then the assessee would be entitled to obtain deduction twice for the same liability on account of excise duty. It is the case of the assessee that the excise duty has been paid, receipted challans of the bank have been obtained for the same and yet the Excise Department has claimed the amount once again and has actually attached the properties of the assessee-company for enforcement of its claim. In such a situation, having made the payment once again, the assessee can lawfully claim the amount as deduction. If the challans were fictitious and the amounts were not actually deposited with the State Bank of India, then in the eye of law there has been no payment of excise duty by the assessee-company. But the money was spent by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the duly authorised agent of the Excise Department. The case is under investigation. It is yet to be found out how the receipted challans of the State Bank of India were issued. If the assessee sent money for payment of excise duty and the money, for some reason or other, did not reach its destination because of embezzlement by the servants or agents of the assessee, then the loss of money must be regarded as having arisen in course of carrying on the business of the assessee. In such a situation, it cannot be said that the assessee has claimed deduction twice on account of the same liability. The genuineness of the assessee's case has not been doubted by the Income-tax Officer. In the case of CIT v. Malayalam Plantations Ltd. [1964] 53 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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