ACIT, CENTRAL CIRCLE-3(3), KOLKATA, KOLKATA vs. SHRI LOKNATH PRASAD GUPTA, NORTH 24 PARGANAS

Per Shri A.T.Varkey, JM

Aggrieved, assessee preferred an appeal before the Ld. CIT(A), who allowed the assessee’s ground of appeal by following the decision of the ITAT on this issue in assessee’s own case in AY 2009-10. Aggrieved, revenue is before us.

4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the claim of assessee was allowed by the Ld. CIT(A) taking note of the decision of ITAT in assessee’s own case for AY 2009-10 passed on 10.06.2015 wherein the Tribunal has held as under: “11. It is not denied by the ld. D.R. before us that the excise duty paid by the assessee is covered by the provisions of section 43B(a). Excise duty is a duty imposed by the Central 2

Loknath Prasad Gupta, AY 2008-09 government under the Central Excise Duty Act. The provisions of section 43B(a), in our opinion, are explicit clear and it allows the deduction in computing the income under the head “income from business” in the year in which the excise duty is actually paid by the assessee irrespective of the previous year in which the liability to pay such sum arise by the assessee, according to the method of accounting regularly employed by the assessee. In view of specific provisions of section 43B(a), it is a case where no other view can be taken. The only view possible in view of the specific provisions of section 43B(a) is that the excise duty has to be allowed in the year in which it is actually paid. It is not denied by the revenue that the assessee has paid the excise duty during the impugned assessment year. Since dictum of law on this count does not require any other interpretation, therefore, we are of the view that the order passed by the Assessing Officer cannot be regarded to be erroneous coupled with the errors. For invocation of the provisions of section 263 both the conditions that the order passed by the Assessing Officer is erroneous as well as prejudicial to the interest of the revenue must be satisfied. Since, in our opinion, there was no error in the order of the Assessing Officer allowing the deduction to the assessee in the original assessment passed under section 143(3) in respect of the excise duty amounting to Rs.29,17,01,515/- in respect of which the proceeding under section 263 has been carried out by the CIT, we, therefore, on this basis itself, set aside the order of the CIT passed under section 263.”

We note that as per sec. 43B(a), it allows deduction in computing the income under the head “Income from Business” in the year in which the excise duty is actually paid by the assessee, irrespective of the previous year in which the liability to pay such sum arise by the assessee, according to the method of accounting regularly employed by the assessee. therefore, as per sec. 43B(a) of the Act, the excise duty has to be allowed in the year in which it is actually paid. It is not the case of the Revenue that the assessee has not paid the excise duty during the assessment year under consideration. In such a scenario, we do not find any infirmity in the order passed by the Ld. CIT(A) on the issue and, therefore, we uphold the impugned order of Ld. CIT(A). We, therefore, dismiss this ground of appeal of revenue.

5. In the result, appeal of Revenue is dismissed. Order is pronounced in the open court on 22/06/2018 Sd/- Sd/- (M. Balaganesh) (Aby. T. Varkey) Accountant Member Judicial Member

Dated :22nd June, 2018 JD(Sr.P.S.)

Loknath Prasad Gupta, AY 2008-09 Copy of the order forwarded to:

1. 1. Appellant – ACIT, Central Circle-3(3), Kolkata. 2 Respondent – Shri Loknath Prasad Gupta, Ramkrishna Dev Path, Titagarh, 24 Parganas (N), Kol-700 119..

3. The CIT(A) - 21, Kolkata. (sent through e-mail)