JUDGEMENT
Per Shri K.S.Vishwanathan, Accountant Member-In this appeal, the assessee a registered firm running a rice mill has taken objections to two additions sustained by the Commissioner (Appeals). The first item which we consider is Rs. 11,302. The assessee had to pay market cess in respect of paddy purchased during the accounting year. The total cess payable was Rs. 14,560. Now the cess payable in respect of the assessee, this payment is due only in the next year and therefore the provisions of section 43B would not be applicable. The assessee had no objection for the addition of Rs. 11,302 i.e., Rs. 14,560-Rs. 3,258. The Income-tax Officer how ever considered that the entire amount of Rs. 14,560 is to be disallowed under s. 43B. -
(1.)
(2.)The assessee appealed. The Commissioner (Appeals) held that section 43B bars claim for deduction in respect of tax or duty and the market cess was neither tax nor duty. He, therefore, accepted the assessees contention to the extent of Rs. 3,258. However, with regard to the balance amount of Rs. 11,301 he expressed his opinion that the assessee cannot claim this deduction in appeal because he had already to be assessed thereon.
It is against this finding that the assessee has come on appeal. Now it is quite clear in view of this Benchs decision in the case of ITO v. Sree Dhanalakshmi Rice Co. [1986] 19 ITD 601 that the market cess is neither tax nor duty and would not come under the purview of section 43B. That being so, the entire amount of Rs. 14,560 should have been allowed as business expenditure. The reason given by the Commissioner (Appeals) for not entertaining the assessees appeal for deleting this amount is that the assessee had already added back the market cess in the return disclosing it as income and it would not be proper to take up the matter in appeal. Now the proposition that an amount agreed to be assessed cannot be agitated later in appeal has its limitations. Where certain facts have to be ascertained and on ascertaining the facts, the assessee had come forward for inclusion of the amount, there cannot be a question of the assessee going back on the agreement to included the amount for assessment. However, where there is no dispute on facts and the assessee had conceded the amount for assessment on an erroneous appreciation of the position of law, it is open for the assessee to take up the matter in appeal. In such cases, the only point the appellate authority has to see is the question of law regarding allowability. In considering such an issue, the Commissioner (Appeals) will not be acting beyond his jurisdiction. We, therefore, hold that the assessee is entitled to the deduction of Rs. 11,300 also.
(3.)THE second issue is the provision made for sales-tax amounting to Rs. 13,000. THE accounting year followed by the assessee is the year ending 20th December, 1983. In respect of the purchase of paddy and sale of rice, the assessee is liable to pay sales-tax. THE Income-tax Officer found that the assessee had made a provision towards the liability to pay sales-tax and this amount of Rs. 13,000 was debited to the P & L A/c. It was claimed before the Income-tax Officer that the provisions of section 43B will not be applicable because this amount represents the liability to pay sales-tax in respect of the sales made in the last month of the accounting year and this sales-tax is due for payment only by 15th of January, 1984. Since it has not yet fallen due for payment in the accounting year it was claimed that the prohibition in section 43B will not be applicable. THE Income-tax Officer did not accept this contention.
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