CIT vs. MARUTI SUZUKI INDIA LTD

PDF · subscribers
ITA/172/2012HC DelhiDLHC01026103201207 December 2017Bench: CASES PERTAINING TO SPL.DIVISION BENCHES2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal was correct in law in deleting the addition of Rs. 23,67,21,074/-. The Court answered the framed question of law in the affirmative, in favour of the assessee and against the Revenue. This decision was based on the Court's own judgment delivered on the same day in a related appeal, ITA No. 250 of 2005. The ratio decidendi would be that custom duty paid on components imported for export, where the export occurs within the same financial year, does not fall within the disallowance provisions of Section 43B of the Income Tax Act, 1961. The operative direction was to dismiss the appeal filed by the Revenue.

What were the facts?

The Revenue has filed an appeal against an order dated August 19, 2011, passed by the Income Tax Appellate Tribunal (ITAT) for the Assessment Year 2005-06. The ITAT had deleted an addition of Rs. 23,67,21,074/-. The dispute concerns the application of Section 43B of the Income Tax Act, 1961, to custom duty paid on imported components that were subsequently used for export by the end of the financial year. The High Court admitted the appeal and framed a specific question of law for consideration.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in deleting the addition of Rs. 23,67,21,074/- by applying the provisions of Section 43B of the Income Tax Act, 1961, in respect of the custom duty paid on import of components which were used for export by the end of the year? Assessee's Contention: The judgment does not record specific arguments made by the assessee before the High Court. However, the ITAT's deletion of the addition implies the assessee likely argued that Section 43B was not applicable to the custom duty in question, particularly given the export of the components. Revenue's Contention: The Revenue's appeal suggests they contended that the custom duty paid on imported components, even if used for export, should be disallowed as an expenditure in the year of payment under Section 43B, as it was a statutory liability.

Which sections of the Income-tax Act were involved?

Section 43B

AI-generated summary — verify with the full judgment below

ITA No. 172/2012

Page 1 of 2

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI +

ITA No. 172/2012 Reserved on: 11th November 2017

Decided on: 7th December, 2017

COMMISSIONER OF INCOME TAX, DELHI ....Appellant Through: Mr. Mr. Rahul Chaudhary and Mr. Sanjay Kumar, Advocates.

versus

MARUTI SUZUKI INDIA LTD

..... Respondent Through : Mr. S. Ganesh, Senior Advocate with Ms. Kavita Jha, Mr. S. Sukumaran, Mr. Anand Sukumar, Mr. Bhuwan Dhoopar, Ms. Roopali Gupta and Mr.Bhupesh Pathak, Advocates.

CORAM: JUSTICE S. MURALIDHAR JUSTICE PRATHIBA M. SINGH

JUDGMENT %

07.12.2017 Dr. S. Muralidhar, J.: 1. This is an appeal by the Revenue against the impugned order dated 19th August 2011 passed by the Income Tax Appellate Tribunal („ITAT‟) in ITA No.2188/Del/2010 for the AY 2005-06.

2.

While admitting this appeal on 14th May 2013, the following question of law was framed for consideration:

ITA No. 172/2012

Page 2 of 2

“Whether on the facts and in circumstances of the case, the Income Tax Appellate Tribunal was correct in law in deleting the addition of Rs.23,67,21,074/- by applying provisions of section 43B of the Income Tax Act, 1961 in respect of the Custom Duty paid on import of components which were used for export by the end of the year?”

3.

In view of the decision of this Court today in ITA No.250 of 2005, the above question is answered in the affirmative, i.e. in favour of the Assessee and against the Revenue.

4.

ITA No. 172 of 2012 is accordingly dismissed.

S. MURALIDHAR, J.

PRATHIBA M. SINGH, J. DECEMBER 07, 2017 Rm

More judgments on Section 43B

All 7,161 judgments and leading authorities on Section 43B →

Recent GST High Court judgments

Search GST case law →