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TMI Blog1992 (1) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... uced by the assessee were liable to Central Excise Duty and it is an admitted position that total liability incurred in the relevant period amounted to Rs. 8312.41 lakhs. The assessee actually paid towards duty a sum of Rs. 6,664.77 lakhs and debited the same in the Profit Loss Account of the year. This has been allowed as a deduction and is not subject-matter of any controversy. Out of the balance amount of duty liability, the assessee debited a sum of Rs. 1022.64 lakhs in the Profit Loss Account under the head " Excise Duty and Commercial liabilities (Note 6) ". 4. The circumstances under which the liability remained unpaid as narrated by the assessee are recorded by the CIT(A) in para 5. 1, pages 15 to 17 of his order. It is not necessary to repeat them. 5. The Assessing Officer considered the amount of Rs. 1022.64 lakhs as outstanding liability of duty disallowable under the provisions of section 43B of the Act. It was contended before him that the amount claimed was not " tax or duty " covered by section 43B. The assessee explained that it had obtained Stay Order from the High Court and had cleared the goods on the basis of bonds and bank guarantees. The amount claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber, 1983 was Rs. 4,26,24,000. The provision of section 43B was not applicable to above amount. In support of this claim the assessee relied on first proviso to section 43B inserted by the Finance Act, 1987 which, as per decision of the Tribunal in ITO v. K.S. Lokhandwala [1989] 31 ITD 305 (Ahd.) was applicable from the assessment year 1984-85 onwards. In respect of second item of Rs. 625 lakhs representing outstanding liability of Central excise, the assessee contended that amounts stayed by the High Court were not affected by the provisions of section 43B. The assessee claimed that " value of Bonds debited to P L A/c. being Rs. 1,022.64 lakhs there could be no justification for making further addition of Rs. 625 lakhs ". The assessee thus objected to the proposed enhancement of the assessment besides challenging the disallowance made by the Assessing Officer. 9. The CIT(A) carefully considered various submissions advanced by the assessee but was unable to persuade himself to accept them. Rejecting the contention that the amount Was not duty, the CIT(A) observed " even though it may be disputed, the entire amount of Rs. 16,47,64,000 still represented part of excise duty liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) held that it was not clear as to whether the above amount was actually paid, as claimed before him. He further noticed certain discrepancies between the above figure and Rs. 426.24 lakhs claimed to have paid in January 1984. The learned CIT(A) accordingly directed the Assessing Officer to gather necessary facts/evidence in the matter. The above finding was not challenged before us and, therefore, nothing more be stated. The learned CIT(A) also held that the first proviso to section 43B inserted by the Finance Act, 1987 was applicable from 1-4-1988 and not in the assessment year 1984-85. This view runs counter to the view taken by the Hon'ble Calcutta High Court in the case of CIT v. Sri Jagannath Steel Corpn. [1991] 191 ITR 676 which was cited before us. In the above case relating to assessment year 1984-85 their Lordships considered the first proviso to section 43B and held it to be retrospective in operation. Its benefit was held to be available to taxpayer in respect of assessment years 1984-85 to 1987-88 also. The requirement to furnish evidence of payment of tax along with the return which, in the view of the learned CIT(A) was a condition to apply the said proviso, is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l excise duty. It was, therefore, for the assessee to show by placing before us the terms of bonds/bank guarantee or the terms of Stay Orders of the Courts to show that excise duty liability was replaced by some other kind of liability. This has not been done. We may mention that the assessee justifies the claim that it was a liability ' incurred ' wholly on account of the view taken by the authorities under the Excise Act. The above view could be displaced through final order of a competent authority and not on execution of bonds or interim stay order. We, therefore, hold that the entire amount is covered by the word ' duty ' as under stood in section 43B of the Act. 13. The learned counsel for the assessee then contended that for application of section 43B the amount of tax or duty should be " payable ". In the present case, the High Court had stayed recovery of duty on terms of bonds executed by the assessee. There was, thus, no enforceable liability to pay duty. The amount not being " payable " the question of application of section 43B would not arise. Our attention was drawn to the decision of the Supreme Court in the case of CWT V. J.K. Cotton Mfrs. Ltd. [1984] 146 ITR 55 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oked at without the glasses provided by the context. With those glasses we must look at the Act as a whole and discover what each section, each clause, each phrase and each word is meant and designed to say as to fit into the scheme of this entire Act." Having regard to the aforesaid principle of interpretation in our view the assessee can derive no help from the decision of the Supreme Court or of the High Court approved therein given in totally different context, circumstances and acts. 15. The assessee strongly relied upon the ad interim order of the Hon'ble High Court dated March 1, 1991. The relevant portion which we (respondent No. 3) have to take into account while disposing of this appeal is as under : " (2) The Respondent No. 3 will hear and dispose of the appeal filed before it by the petitioner No. 1 without taking into consideration the provisions of the said Explanation. This restriction should not be understood as an indication that this court has accepted the construction put on the said Explanation by the petitioners viz. that the said Explanation is a mandatory and not clarificatory." We cannot take into account the Explanation 2 for disposal of appeal. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d along with first proviso and both are harmoniously construed keeping in view the intent and purpose of the provision the only conclusion possible is that a liability incurred in respect of amount referred to in section 43B is to be allowed only on payment basis, subject to exceptions provided in the first proviso. We may mention that the purpose of section now judicially accepted to be reflected in the Budget Speech of 1983-84 of the Finance Minister [1982] 140 ITR St. 31, is to cover taxpayers who do not discharge their statutory liability in respect of excise duty, etc. for long period of time. But nonetheless claim the statutory liability as deduction in their income-tax assessments even as they resort to legal action. Thus depriving the Government of its dues while enjoying the benefit of non-payment. Section 43B was introduced to cover the cases like that of the assessee before us. Thus, looked from any angle, we are notable to hold that the assessee was entitled to claim deduction of excise duty liability incurred without actual payment in the accounting year. We, therefore, reject this contention of the assessee and uphold the disallowance of Rs. 1,022.64 debited in the Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r consideration. In fact, the assessee evaluated its total liability in respect of goods manufactured up to December 31,1983 at Rs. 5,903.31 lakhs. After taking into account the liability already provided for, made further provision of Rs. 1,022.64 lakhs and debited this amount to profit and loss account. No adjustment entry relating to " provision made in earlier year no longer required " was made. Shri Dastur offered the assessee's books of account of the relevant period for our examination. It was accordingly submitted that there was no excess provision of earlier year written back and adjusted towards the liability of the current year. It was further argued that only the liability which is debited to the Profit Loss Account and claimed as deduction can be added back under section 43B. The amount of Rs. 625 lakhs which was not charged to the profit of the year and not deducted in computing the income could not be disallowed. Shri Dastur in this connection relied upon the decision of the Calcutta High Court in the case of CIT v. Duncan Bros. Co. Ltd. [1983] 140 ITR 335. Reliance was further placed on the decision of the Tribunal in ITO v. Thakersi Babubhai Co. [1986] 18 ITD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egularly employed of any sum payable by way of tax, duty, cess or fees (referred as " duty " hereinafter) " shall be allowed only in computing the income of the previous year in which such sum is actually paid. The section on its proper construction impliedly prohibits deduction of duty other than actually paid. The provision is meant to neutralise the effect of " deduction " taken into account in the computation of profits in respect of a liability mentioned in the section. But section is not a charging section. The revenue cannot employ it to add an amount which is otherwise not " deducted " in the computation of the previous year's income. But to find out whether a particular amount has been debited or not, one has not merely to look at Profit Loss Account. 'There is no prohibition to claim deduction in an account other than the Profit Loss Account. All the same, the manner in which entries are made or not made at all is relevant but not decisive under the Income-tax Act. Legal implication of an event or transaction is important and not the manner in which record is made in the books of account. 19. In the case in hand, there is no dispute that the assessee debited a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o amounts debited to P L Account to ' the extent it is not paid '. The value of Bonds debited to the P L Account being Rs. 10,22,64,000 there can be no justification for making a future addition of Rs. 6,25,00,000." The ld. CIT(A) rejected the above contention and his order has been impugned by raising 59 long grounds of appeal covering almost seventeen foolscap papers. Every conceivable argument has been taken. But still the crucial finding of the ld. CIT(A) that Rs. 625 lakhs represented " provision made in earlier years no longer required " has not been disputed. On the contrary, the above finding is accepted as correct. This is what is stated in Ground No. 25. The relevant portion is reproduced below : " The CIT(Appeals) failed to appreciate that the additional sum of Rs. 625 lacs was not charged to Profit Loss Account of the relevant year inasmuch as by taking into consideration the liabilities of the earlier years as also of the year concerned and the provisions already made in the earlier years the appellant did not charge the Profit Loss Account by the sum of Rs. 625 lacs as the same was already covered by the earlier years provisions." 22. It is thus not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1) in the impugned order. We have already shown how outstanding liabilities of Rs. 1,647.64 lakhs were provided for but shown at Rs. 1,022 lakhs in the Profit Loss Account. Under the provision of section 43B the total outstanding liabilities were to be added back. This is what the ld. CIT(A) has done. He has merely corrected the amount of disallowance already made by the Assessing Officer. For all the above reasons, we confirm the order of the ld. CIT(A) on this point. 24. The next controversy relates to charging of interest under section 215 of the Act. At the time of assessment, the Assessing Officer charged a sum of Rs. 4,71,59,042 as interest for short-fall in the payment of advance tax. Before the ld. CIT(A) the assessee contended that the A.O. made disallowance under section 43B and failed to allow proper benefit of tax deducted at source (TDS) and of the amount deposited with IDBL. If tax on disallowed amount was ignored and proper account of deposit with IDBL, TDS, etc. was taken, the difference between 83 1/3% of the assessed tax and the amount deposited by the assessee and paid as advance tax would be negligible. It was further contended that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Central Provinces Manganese Ore Co. Ltd. v. CIT [1986] 160 ITR 961, the ld. CIT(A) held that appeal against levy of interest under section 215 was not competent. The assessee is aggrieved, and has brought the issue in appeal before us. 26. Shri Dastur, while assailing the above order of the ld. CIT(A), contended that in the present case the assessee had filed a revised return to take benefit of Amnesty Scheme announced by the Finance Ministry as per CBDT Circular No. 472 [F. No. 225/86/85-IT (A-11)], dated 15-10-1986. It was explained that in the original return the assessee had shown total income at Rs. 667,80,125 against which setoff of carried forward loss of Rs. 615,75,210 relating to earlier years was claimed. In the revised return, the assessee did not claim carry forward loss and disclosed total income at Rs. 667,80,125. In the covering letter filed along with the return, the assessee had claimed waiver of interest. Shri Dastur contended that the assessment was completed on the basis of above return which was filed under amnesty scheme and, therefore, the Department could not charge interest under section 215. He drew our attention to questions and answers of CBDT in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the light of the decision of the Hon'ble Supreme Court, the following legal propositions relevant to the controversy before us emerge : (a) The Assessing Officer is required to consider before imposing levy of interest under section 215 the question of assessee's liability to pay advance tax, the amount, if any, paid as advance tax as also the income which is subject to advance tax and included in the total income determined on the regular assessment. The Assessing Officer is also expected to consider whether, in the circumstances of the case, interest chargeable is to be reduced or waived altogether. He is further expected to issue notice to the assessee and hear him on the question of levy of interest as the levy of interest is a part of assessment and part of liability imposed in the regular assessment order. (b) If the assessee is aggrieved by an order levying interest and wishes to challenge its liability to pay interest, it is open to it to challenge the same in an appeal provided under clause (c) of sub-section (1) of section 246 of the Act. Such challenge may relate to liability of the assessee to pay advance tax alone or that the amount of tax determined by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para 9 of the said letter, the assessee further requested that interest-charged be waived under rule 40 of the Income-tax Rules, 1962. A further request to stay recovery of demand was also made. It appears that by February 16, 1990, the assessee had also approached the Chief Commissioner of Income-tax, New Delhi, with a request to issue directions for waiving interest charged under section 215. The aforesaid letter of the assessee was considered by the Assessing Officer and a reply dated February 16, 1990 was sent. The Assessing Officer disagreed that the provisions of section 43B were wrongly applied. In his view interest under sections 215/216 was properly computed and charged. The Assessing Officer took note of the Petition filed before the Chief Commissioner of Income-tax and made the following observations : " A. The interest under sections 215 216 payment amounting to Rs. 4,76,79,042 is stayed fill disposal of your petition before the Chief Commissionerof Income-tax (C), North, New Delhi." A copy of another application for waiver of interest in terms of section 215 read with section 215(4) and rule 40 dated April 30, 1990 is also placed on record. It has been contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the long letters written to the Assessing Officer on January 30, 1990 and on April 30,1990 challenging the levy of interest under section 215. As an afterthought, however, this claim has been raised again before the Tribunal. We, however, find no substance in the claim. In the first place, there are no clear instructions and circulars having binding force in terms of section 119 of the Act. Secondly, the assessee in the revised return filed on March 30, 1987 made no further disclosure of income not disclosed earlier and, therefore, the revised return could not be treated as a return under Amnesty Scheme. The claim of brought forward loss of earlier years which was not made in the revised return cannot be treated as disclosure of income. The brought forward losses are to be allowed in accordance with law and on the basis of record i.e., assessments made in the earlier years, The Amnesty Scheme was mere directions to the official to apply existing statutory provisions in a more liberal manner in cases where voluntary disclosure of income was made. The assessee's revised return cannot be treated as Amnesty return. In view of the aforesaid discussion we do not find any force in this su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 194A, section 194C, section 194D, section 195 and section 196A so far as such tax relates to income subject to advance tax and so far as it is not due to variations in the rates of tax made by the Finance Act enacted for the year for which the regular assessment is made." It is clear from the definition that " assessed tax ", for the purpose of sub-section (5) of section 215, is not the tax determined on the basis of regular assessment. Certain adjustments are to be made while considering short-fall in payment of advance tax. Tax relating to income, subject to advance tax is only to be taken into account as " assessed tax ". To put it differently, out of the total income, the items on which no advance-tax is payable are to be eliminated. In the Act ' income ' chargeable under the heads " capital gains " and " casual income " in the nature of lottery winnings, etc. are not subject to advance tax. There can be no dispute that for the purpose of sub-section (5) of section 215 the above items are to be excluded for determining the " assessed income " under section 215. The question before us is whether tax payable on the amount added under section 43B is also to be excluded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of income finally assessed needs no change and the same is upheld. 36. The next controversy relates to disallowance of Rs. 15,09,100 under section 40A(5) of the Act being cash reimbursement of medical expenses and house rent allowance to employees beyond the prescribed limits. The disallowance made was challenged in appeal before the ld. CIT(A) and it was contended that out of total employees,71 employees were not in receipt of any perquisite.The total emoluments of these employees inclusive of medical and house rent allowance was well within the limits prescribed under section 40A (5) of the Act.The assessee filed the list of such employees and details of salary paid to them and relied on the decision of the Hon'ble Calcutta High Court in the case of CIT v. Kanan Devan Hills Produce Co. Ltd. [1979] 119 ITR 431. The CIT(A) directed the Assessing Officer to recompute the amount disallowable after excluding the admissible limit of 71 employees. Subject to the above direction, the disallowance was confirmed. The assessee has brought the issue in further appeal before the Tribunal. 37. We have heard the parties. Shri Dastur cited certain decisions in support of the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt arrived at with the workers under section 2(p) of the Industrial Disputes Act, 1947 and other labour laws, and the contribution made to the Fund are payments made " under any other law for the time being in force " and therefore not hit by the provisions of sub-section (9) of section 40A of the Act. In the alternative, it was contended that contributions made were covered by the provisions of sub-section (10) of section 40A. In our opinion, the submissions of Shri Dastur are well-founded. The contributions having admittedly been made under settlement with the workers have to be treated as payment under Industrial Disputes Act and, therefore, covered under exceptions provided in sub-section (9) of section 40A. The alternative claim of the assessee has been admitted even by the ld. CIT(A). He refused to grant the relief as the claim was not made before the Assessing Officer. But this fact alone, in our opinion, was not sufficient to disallow the claim of the assessee. In our view on the facts and circumstances of the case the disallowance is not justified. We direct the Assessing Officer to delete the disallowance of Rs. 49,000. 40. The next controversy relates to claim of addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terated that " alteration and rearrangements " were new machinery entitled to investment allowance. Likewise, investment allowance was permissible on discounting charges. The assessee also sought to raise additional ground of appeal claiming 100% depreciation on energy saving devices under rule 5, appendix 1, para F(2A) of the Income-tax Rules, 1962 and on machinery and plant costing less than Rs. 5,000 each. The assessee also claimed that if " alteration and rearrangements " are not new machinery and are to be treated as replacement only then 100% of the cost be allowed as revenue expenditure. 42. The ld. CIT(A) examined the details of " alteration and rearrangements " and found that details included certain items which did not qualify for depreciation at all. He further directed that only normal depreciation should be allowed on them. On the expenditure which was to be treated as revenue, no initial depreciation was admissible. He further directed that the issue relating to the disallowance of Rs. 12,52,808 and Rs. 40,17,730 be re-examined and verified and then proper depreciation allowed in accordance with law. In respect of disallowance of depreciation on other items also, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achinery had erred in not allowing initial depreciation on such machinery. The ld. CIT(A) should have allowed initial depreciation without remitting the matter back to the Assessing Officer. The ld. CIT(A), as an appellate authority, should have disposed of the matter, instead of remitting it for re-examination. Shri Dastur further objected to the CIT(A)'s observation on claim of initial depreciation and investment allowance regarding the additions covered under the head " alteration and rearrangements ". He further objected to the CIT(A)'s refusal to entertain additional grounds of appeal. The mere fact that the claim was not made before the Assessing Officer was not sufficient to reject the additional grounds of appeal, Shri Dastur further argued. It was pointed out that no Form was prescribed for raising additional grounds of appeal like the case of original appeal. The additional grounds could be raised even orally and it was not necessary to file additional grounds in writing. Fresh and repeated scrutiny of the matter was a source of harassment to the assessee and cannot be encouraged under the law. The above submissions were opposed by the learned departmental representative. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad " alteration and rearrangements " or otherwise. He should consider the question whether any item shown as addition could be allowed as revenue deduction. On other additions, he should allow proper depreciation and investment allowance as permissible under the law. 45. The next controversy relates to relief claimed by the assessee under section 80J and 80HH of the Act. The relief was claimed as per additional grounds of appeal raised before the ld. CIT(A). The ld. CIT(A) in the first place refused to entertain the additional grounds. He, however, directed that if the claim was allowed in earlier year consequential relief be allowed, in this year. The aforesaid directions of the ld. CIT(A) have been challenged before us. 46. It was submitted that the Tribunal had already allowed deduction to the assessee under sections 80J and 80HH in respect of one unit in the assessment year 1979-80 as per its order dated July 11, 1985 for the assessment year 1979-80. Therefore, there was no justification for not allowing the claim for the assessment year under consideration. 47. We have heard the parties. In view of the order of the Tribunal for the assessment year 1979-80 the ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee later on took a somersault and claimed that bad debts were covered under the above provision. In the circumstances of the case, we find no merit in the arguments advanced by Shri Dastur. There is no material on record to show that the original admission or view taken by the assessee was erroneous or was taken under misconception of facts or law. There is thus no justification for permitting the assessee to raise the issue in question through additional grounds of appeal. We, therefore, decline to interfere with the CIT(A)'s refusal to entertain the grounds of appeal relating to bad debts. 51. The Stay granted by the Tribunal vide order dated April 19, 1991 is vacated and the Assessing Officer is directed to pass a fresh order in terms of our directions given above. 52. In the result, the assessee's appeal is allowed partly in the terms indicated above. ORDER As per Dongza thang, Accountant Member --- I fully agree with the order of my learned brother in regard to the enhancement made by the learned CIT (Appeals) and I am of the considered view that the assessee cannot have any grievance at all on this score. This is because the learned CIT (Appeals) has only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company and will be so regarded for the duration of the bond. 4. At the time of assessment, the Assessing officer did not notice the peculiar effect of the adjustment entries made by the assessee in its P. L. A/c and the relevant Excise liability account and he made a disallowance of a sum of Rs. 1,022.64 lakh being unpaid Central Excise liability i.e., (Rs. 7,687.41 lakh minus Rs. 6,664.77 lakhs) claimed in the P. L. A/c. When the assessee took up the matter in appeal before the CIT (Appeals), the learned CIT (Appeals) noticed this aspect and issued notice for enhancement highlighting the issue as follows : " Furthermore, the liability of Central Excise Duty incurred by you during the year was Rs. 83,12,41,000. Against this amount you have made a payment of Rs. 66,64,77,000 during the year. The unpaid outstanding Central Excise liability is, therefore, Rs. 16,47,64,000. This amount should have been added back to your income under section 43B. However, addition has been made only of an amount of Rs. 10,22,64,000. Thus, the balance amount of Rs. 6,25,00,000 was omitted to be added back under section 43B in computing your total income for the assessment year 1984-85." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as made adjustment of Rs. 286.49 lakh out of the same during the year and also made contra entries of Rs.4,813.67 lakh during the year. If the entire amount of the liability on account of execution of bonds for Central Excise liabilities during the year at Rs. 1,647.64 lakh is further provided, the balance as on 31-12-1983 would have stood at Rs. 6,568.81 lakh. The assessee, however, evaluated the outstanding duty and it was assessed at Rs. 5,903.81 lakh as on 31-12-1983. Accordingly, it made a provision only of Rs. 1,022.64 lakh as against the actual liability that accrued during the year at Rs. 1,647.64 lakh. 8. It is the case of learned CIT (Appeals) that since the assessee has got the opening balance of excise duty provision of Rs. 5,167.66 lakh at the beginning of the year, and since further liability of Rs. 1,647.66 lakh has accrued, the provision only of Rs. 1,022.64 lakh during the year amounted to adjusting the difference of Rs. 625 lakh against the excess provision no longer requied. In that view of the matter, he reversed the entry and treated this as indirectly credited to the P. L. A/c. and adjusted against the liability during the year at Rs. 1,647.64 lakh. In ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect position : Dr. Cr. Payments 286.49 Opening balance 5167.66 Contra entries 4,813.67 Contra entries 4813.67 Reversal of liability Liability provided from earlier provision 625.00 for the year 1647.64 Closing balance 5,903.81 ------------------ ------------------- 11,628.97 11,628.97 The consequential effect of the entries in the P. L. A/c should be as follows : Dr. Cr. Raw materials Sales and finished goods Other income Expenses and Excise provision Depreciation written back 625.00 Excise duty (a) Paid 6,664.77 (b) Provision 1,647.64 ---------------- 8,312.41 or Excise duty paid 6,664.77 Provision 1,647.64 Less : Earlier provision adjusted 625.00 ----------------- 1,022.64 --------------- 7,687.41 11. By resorting to a sophisticated method of adjustment entries the assessee attempted to disguise the real effect of the write back and the adjustment made with the current liability without passing them through the p. L. A/c. However, on proper analysis made as above, the real effect and import of the adjustment entries made by the assessee are clear and there is no denying the fact that the assessee has indirectly w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s against actual liability of Rs. 1,647.64 lakh. This direct adjustment entry has the same effect and is tantamount to making a provision from out of its earlier provision though such adjustment has been made by means of a short-cut method of entry in its books. Once the full effect of such device is unfolded, the assessee cannot turn around and claim that the amount is not an income and the liability does not cease and it cannot be assessed as income. It is true that neither the principle of resjudicata nor the rule of estoppel is applicable to successive assessment proceedings. But at the same time, it does apply in the same assessment and the assessee will be bound by its earlier representation of facts and will not be allowed to go back on it at a subsequent stage of the same assessment. The fact that the assessee itself has made adjustment entries and thereby adjusted the current liabilities against the earlier provision no longer required, a circumstance has arisen which the taxing authorities are entitled to take into, consideration and which the assessee cannot be allowed to retrace. 14. With regard to the alleged double addition made by the CIT (Appeals) it is to be not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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