COMMISSIONER OF INCOME TAX Vs. SOUTH INDIA SUGAR LIMITED
SUPREME COURT OF INDIA
COMMISSIONER OF INCOME TAX
South India Sugar Limited
Click here to view full judgement.
(1.)IN respect of Assessment Year 1992-1993 the assessment order was passed on 25/11/1994. The assessing officer computed the value of the
closing stock of the manufacturing goods as far as the assessee was
concerned by including the excise duty payable thereon. The assessee
impugned this addition before the Commissioner (Appeals). By order dtd. 28/2/1995, the CIT (A) rejected the submission of the assessee that the
quantum of excise duty was not includible in the computation of the value of
the closing stock. The CIT (A), however, accepted the alternative submission
of the assessee, namely, that if the cost of the goods had been enhanced by
the excise duty correspondingly it should be allowed to claim the excise duty
as an expense in the profit and loss account.
(2.)ACCORDINGLY the CIT (A) remanded the matter to the assessing officer for the purpose of determining whether in fact the assessee had paid any
amount before the due date of filing of return towards excise duty which
would entitle it to deduction under S. 43-B of the Act. The assessee was
directed to produce datewise particulars of excise duty paid before the return
of income for the assessment year in question and attributable to the closing
stock with adequate evidence within two weeks of the order. The CIT (A)
also directed that if such details were filed, the assessing officer would
determine the same and allow the deduction of excise duty paid before the
due date as a deduction in computation of income. Pursuant to the order of
the CIT (A) by an order dtd. 26/4/1995 the assessing officer recomputed
the total income at Rs. 2,42,15,720.00. The deduction under S. 43-B of the
Act towards excise duty paid before the filing of the return was allowed to
the extent of rupees one crore eighty-seven lakhs and fifty-seven thousand.
Aggrieved by the CIT's (A) order, the assessee had in the meanwhile preferred an appeal before the Income Tax Appellate Tribunal. The Tribunal,
following a Special Bench decision of the Tribunal in Food Specialities, held
that the excise duty was not part of the manufacturing goods and, therefore,
there was no reason to include the same in the value of the closing stock. The
Department took up the matter by way of reference before the High Court
under S. 256(2) of the Act. The High Court rejected the reference.
(3.)WHILE the appeal was being argued before us, the learned counsel appearing on behalf of the assessee stated that the issue was in fact academic
as his client was not seeking to contend, for the assessment year in question
at least, that the excise duty should not have been included in the
computation of the closing stock. It is stated that his client had already paid
the excise duty before the filing of the return and had claimed deduction
which has been allowed on such basis by the assessing officer. According to
the learned counsel for the respondent the order dtd. 26/4/1995 concluded
the issue so far as the assessee was concerned and the assessee was not
interested in reopening the matter in respect of that assessment year.
Copyright © Regent Computronics Pvt.Ltd.