COMMISSIONER OF INCOME TAX vs. M/S ARIHANT IND LTD

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. 100 2004 of IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ----- Income-tax Appeal No. 100 of 2004 Date of decision: 21.7.2010 Commissioner of Income-tax-I, Ludhiana --- Appellant Versus M/s. Arihant Industries Ltd. Ludhiana --- Respondent --- CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- PRESENT: Mr. R.P. Sawhney, Senior Advocate with Mr. for the appellant-Revenue. --- AJAY KUMAR MITTAL, J.

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. 100 2004 of This appeal filed under Section A of the -

, 1961 (

“

)

Income tax Act for short the Act” at the instance of

- the Revenue is directed against the order of the Income tax

,

‘ , ( Appellate Tribunal Chandigarh Bench B’ Chandigarh for “

)

- short the Tribunal” passed on in Income tax

. 1128/ /98,

1992- Appeal No CHANDI for the assessment year

.

, to its processing house While getting the goods back the

assessee pays excise duty and such duty increases the cost

, , of the manufactured and processed goods and thus becomes

.

, ,

part of the sale price The however does not

increase the value of the closing stock by the amount paid

on account of excise duty and yet claims deduction under 43

.

Section B on the basis of actual payment For the 1992-93,

assessment year the assessee filed return declaring

.

total income as Nil The return was processed under Section 143(1)( )

a of the Act and assessment was completed vide

order dated after allowing depreciation and -

. brought forward depreciation to the extent of Rs

-

. 100 2004 of 2,86,73,294/-.

It was noticed during the course of

assessment proceedings that the had claimed

43

.20,14,444/- deduction under Section B amounting to Rs

on account of excise duty paid and mentioning it as .

recoverable The assessee claimed that amount as its loss in

,

and that too in respect of the goods which had not been

. sold and were lying with it in its closing stock The

assessing officer disallowed the deduction so claimed by the

. assessee on the aforesaid count

The view of the assessing officer was upset in

appeal carried by the and the Commissioner of - ( ) [(

“

( ) ], Income tax Appeals Ludhiana in short the CIT A ” vide

order dated deleted the disallowance claimed under 43 ,

.

, Section B made by the assessing officer While doing so ( )

, . .

the CIT A observed that earlier as well i e for the 1984-85 1985-86

assessment years and in the case of the , itself the same question had arisen for

consideration before the Tribunal and the Tribunal had ordered

the exclusion of the excise duty paid but not claimed as

. deduction from the value of the closing stock

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. 100 2004 of This is how the matter came to be carried before

.

, the Tribunal at the instance of the Revenue The Tribunal

after following its own decision in the case of the assessee ,

1985-86 1986-87, itself for the assessment years and

( ),

It is all that prompted the Revenue to file the instant appeal

proposing that the following substantial question of law arises

: for determination by this Court “

Whether in view of the circumstances and facts of ,

-

the case the Hon’ble Income tax Appellate Tribunal

erred in deleting the disallowance made by the

. 20,14,444/- Assessing Officer amounting to Rs

on account of excise duty claimed as deduction but

? not included in the value of closing stock

Learned counsel for the parties are agreed

,

that the Tribunal while hearing the appeal carried at the

1992-93 instance of the Revenue for the assessment year

-

. had relied upon its own decision in Income tax Appeal Nos 912, 652 1408/ /89

and Chandi rendered in the case of the -

. 100 2004 of present itself pertaining to the assessment years 1985-86 1986-87

,

ordered exclusion of the excise duty paid but not claimed as

,

deduction from the value of the closing stock and out of -

. 573 575

. -

. 573-575 1993 Income tax Reference Nos of (

- - , . / . -

. 100 2004 of (ADARSH KUMAR GOEL) July 21, 2010 JUDGE *rkmalik*