9911796707
TMI Blog1994 (1) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ased during the accounting year. 2. We shall deal each of the grievance in serial order. The facts culled out in respect of the first grievance are as under : 2.1. The Supdt. of Central Excise Duty issued a show-cause notice dated 8th February, 1980 (received by the assessee on 12th February, 1980) proposing to levy excise duty to the tune of Rs. 5,51,130. The assessee-company on the basis of this show-cause notice made a provision towards excise duty liability and reduced its profit by debiting it to the P L account as it followed mercantile system of accounting. In the said show-cause notice, the Supdt, of Excise Duty demanded a reply and explanation before a formal adjudicating order is passed. The assessee submitted its explanation and reply on the strength of which the show-cause notice was withdrawn and cancelled as per order of the Asstt. Collector of Central Excise, Ahmedabad dated 31st August, 1982. When the assessment was processed, the Assessing Officer took note of the order dated 31st August, 1982 of the Asstt. Collector, Central Excise and he did not allow the claim of excise duty liability so made by the assessee in its account on the strength of the show-caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 5,51,130 on the basis of the show-cause notice and both the lower authorities erred in giving such relief to the assessee. To support the case, the assessee's counsel relied upon the following case laws, the details of which are as under : (i) CIT v. Century Enka Ltd. [1981] 130 ITR 267 (Cal.) (ii) ITO v. Sylvania Ltd. [1984] Tax. 74(6)-124 (Delhi)(Trib.) (iii) CIT v. Tata Chemicals Ltd. [1986] 162 ITR 556 (Bom.) (iv) Shrikant Textiles v. CIT [1971] 81 ITR 222 (Bom.) (v) Devi Das Madho Prasad v. CIT [1967] 63 ITR 356 (All.) (vi) Instrumentation Engineers (P.) Ltd. v. ITO [1990] 32 ITD 406 (Hyd.) and order passed by 'C' Bench of this Tribunal in the case of Maneklal Harilal Mills Ltd. v. ITO [IT Appeal Nos. 2888 and 2615 (Ahd.)/1984, dated 29-12-1986] relating to assessment year 1983-84 was relied wherein it has been held that on the basis of show-cause notice a liability accrues to an assessee and the same is allowable as deduction in computing the taxable profits. The assessee's counsel has also filed a copy of the order of Ahmedabad Bench 'C' of this Tribunal being R.A. Nos. 206 and 207 (Ahd.) of 1987 arising out of IT Appeal Nos. 2615 and 2888 (Ahd.) of 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing excise duty provision created on the strength of show-cause notice dated 8th February, 1980 which never existed when the assessment was being completed. According to the Departmental Representative, appeal of the assessee-company has to be dismissed. 5. We have given our anxious consideration to the arguments advanced before us by both the representatives in the light of the material on record and the case laws cited before us. In our view, the assessee is not entitled to the deduction of the sum of Rs. 5,51,130 being excise duty provision created on the basis of the show-cause notice dated 8th February, 1980. The case laws relied upon by the assessee's counsel also, in our view, do not come to the rescue of the assessee as in none of those cases the present facts of the case exsted. We, therefore, do not wish to discuss the facts of those cases In detail. The same are, therefore, clearly distinguishable. In those cases, relied upon by the assessee's counsel, it has consistently been held that on the strength of the show-cause notice the assessee is entitled to claim deduction, but in none of those cases the show-cause notices issued were withdrawn and cancelled by a subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. It is basic to our processual jurisprudence that the right to relief must be judged to exist as on the date of suitor institutes the legal proceeding. Equally clear is the principle that procedure is the handmaid and not the mistress of the judicial process. If a fact, arising after the lis has come to Court and has a fundamental impact on the right to relief or the manner of moulding it, is brought diligently to the notice of the Tribunal, it cannot blink at it or be blind to events which stultify or render inept the decretal remedy. Equity justifies bending the rules of procedure, where no specific provision or fair play is violated, with a view to promote substantial justice subject, of course, to the absence of other disentitling factors or just circumstances. Nor can we contemplate any limitation on this power to take note of updated facts to confine it to the trial Court. If the litigation pends, the power exists, absent other special circumstances repelling resort to that course in law or justice. Rulings on this point are legion, even as situations for applications of this equitable rule are myriad. We affirm the proposition that for making the right or remedy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 150 6. Flame Motors 5 H.P. 4,740 ---------- 24,640 ---------- 7. The Assessing Officer did not grant investment allowance on the abovementioned items of expenditure and on first appeal, the AC directed the Assessing Officer to grant investment allowance in respect of pump set (Rs. 5,500) and flame motors (Rs. 4,740). In respect of the remaining items of expenditure aggregating to Rs. 13,880, the AC was of the opinion that the same was revenue expenditure but did not direct the Assessing Officer to allow the same as revenue expenditure. The assessee has made out a grievance that the AC having held the total expenditure of Rs. 13,880 on different heads was revenue expenditure, no direction was given to the Assessing Officer to allow the same as revenue expenditure. 8. We have heard the arguments advanced by both the sides in respect of the second grievance of the assessee. In our view. the AC was right in coming to the conclusion that the assessee is not entitled to investment allowance in respect of four items of expenditure aggregating to Rs. 13,880. However, since the AC has concluded that the same constituted revenue expenditure, he ought to have given a direction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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