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TMI Blog2022 (3) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... f customs duty and central excise duty. This amount being penalty, cannot be allowed as a deduction. Moreover, the payment has been made by the assessee under protest. Therefore, the amount is definitely a disputed liability and cannot be said that the liability has crystallized/accrued to the assessee during the relevant assessment year In the instant case, the import is of capital asset and that too not by the assessee, hence, the impugned expenditure cannot be equated with the expenditure incurred for improvement of a leasehold property. Therefore, the claim of the assessee has been rightly rejected by the CIT(A). - Decided against assessee. - ITA No. 1954/Bang/2016 - - - Dated:- 21-2-2022 - George George K., Member (J) And Padmav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erator set during the year 1996 and leased the same to the assessee-company. The assessee claimed that it was a 100% EOU and accordingly claimed exemption under Notification No. 13/81 and 53/97 of the Customs Department permitting duty free of import of capital goods. The assessee states that subsequently, the Customs and Central Excise Department issued show cause notice on 22.03.2002, whereby the assessee's claim of exemption for duty free import was held to be wrong. It was stated by the Customs and Central Excise Department that the assessee had used imported turbine for producing electricity which were sold to Maharashtra Electricity Board, and therefore, exemption was wrongly claimed by the assessee. Accordingly, the Customs and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant during the year under consideration and hence the amount is allowable as deduction u/s. 438 of the Act. In this regard it is relevant to note that Sec. 43B of the Act refers to allowability of expenses which are 'otherwise allowable' under the Act, subject to. other conditions. Therefore it is imperative that for claiming any deduction u/s. 438 of the Act, the amount should be 'otherwise allowable' as deduction. In the present case, the Turbine was imported, by M/s. Mysore Petro Chemicals Limited and therefore, the liability for payment of the import duty and other ancillary levies should be that of MPCL and not of the appellant. Therefore, the amount paid by the appellant cannot be considered to be an expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Taxman 1 (SC), the disallowance of the claim made by the AO is found to be legally justified. 5. Aggrieved, assessee has filed this appeal before the Tribunal. The learned AR has filed a paper book comprising of 119 pages. Apart from reiterating the submissions made before the Income Tax Authorities, the learned AR relied on the judgment of the Hon'ble jurisdictional High Court in the case of CIT v. M/s. NCR Corporation Pvt. Ltd. reported in (2020) TaxCorp (DT) 83007 (HC-Karnataka). (judgment dated 16th June, 2020) 6. The learned Departmental Representative, on the other hand, strongly supported the findings of the CIT(A). 7. We have heard rival submissions and perused the material on record. Admittedly, the turbine generator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerator. The assessee had claimed this amount as deduction u/s. 43B of the I.T. Act. Section 43B of the I.T. Act refers to allowability of expenditure which are otherwise allowable under the Act, subject to other conditions. Therefore, it is imperative for claiming any deduction u/s. 43B of the I.T. Act, amounts should be otherwise deductible. In the instant case, it is a case of import of a capital asset and that too not by the assessee, hence, the impugned expenditure cannot be claimed as a revenue expenditure. Therefore, the provisions of section 43B of the I.T. Act cannot be applied to the claim of deduction of an amount which otherwise is not allowable as deduction in the hands of the assessee. Further, the impugned amount includes a s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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