JEEVAN DIESELS & ELECTRICALS LTD.,KOLKATA vs. ITO, WD-2(3), KOLKATA, KOLKATA

This is an appeal filed by the assessee against the order of Ld. CIT(A)-1, Kolkata dated 31.03.2016 for AY 2011-12.

The only issue in dispute is against the action of Ld. CIT(A) in confirming the addition made by the AO on account of unpaid liability of excise duty u/s. 43B of the Income-tax Act, 1961 (hereinafter referred to as the “Act”). Briefly stated facts as observed by the AO are that while examining the books of account of the assessee, the AO found that the assessee did not pay Rs.88,82,270/- on account of Central Excise Duty of Rs.85,40,594/- and Employees Provident Fund of Rs.3,41,676/- on or before the due date of filing of return of income. The assessee was asked to explain why such amount should not be disallowed as per provision of sec. 43B of the Act and in turn added back to the total income of the assessee during the year under consideration. The assessee explained that due to shortage of fund, payment was delayed. The explanation given by the assessee was not acceptable to the AO, so in the absence of evidence of payment on or before filing return, the AO added the sum of Rs.88,82,270/- to the total income of the assessee. On appeal, Ld. CIT(A) confirmed the action of the AO on the same ground i.e. the assessee did not pay the Central Excise Duty of Rs.85,40,594/- on or before the due date of filing of return of income. Aggrieved, assessee is in appeal before us. 3. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the AO has disallowed the claim of Excise Duty deduction u/s. 43B of 2 Jeevan Diesels & Electricals Ltd., AYs- 2011-12 the Act on the ground that the assessee has not made the payment before the due date of furnishing of return of income. The Ld. CIT(A) confirmed the decision of the AO. The only plea of the Ld. AR is that sec. 43B of the Act clearly states that any sum payable by the assessee by way of tax, duty cess or fee shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in Sec. 28 of that previous year in which same is actually paid by him. Therefore, according to Ld. AR, a direction/observation needs to be made that when any sum payable by the assessee by way of excise duty for this A.Y is complied by the assessee in any subsequent A.Y, then it needs to be allowed in the year in which the assessee has made the actual payment irrespective of the previous year in which the liability to pay such sum was incurred by the assessee. Needless to say, when sec. 43B of the Act is clear and unambiguous that when the assessee makes the payment of tax/duty in any year, then that should be allowed in that assessment year when the assessee makes the actual payment irrespective of the previous year in which the liability to pay such sum was incurred by the assessee. With the aforesaid observation, we dismiss the appeal of the assessee.

In the result, appeal of the assessee is dismissed. Order is pronounced in the open court on 24.01.2018 Sd/- Sd/- (Dr.A. L. Saini) (Aby. T. Varkey) Accountant Member Judicial Member Dated : 24th January, 2018 Jd.(Sr.P.S.) Copy of the order forwarded to: 1. Appellant – Jeevan Diesels & Electricals Ltd., 17, Ganesh Chandra Avenue, Kolkata-700 013. Respondent – ITO, Ward-2(3), Kolkata. 2 3. The CIT(A) Kolkata.