S.RAFAT ALAM, J. - (1.) THIS appeal is under S. 260A of the IT Act, 1961 (in short 'the Act') against the judgment and order of the Tribunal dt. 11th Feb., 1999, in ITA No. 6797/D/92 whereby the appeal of the Revenue appellant challenging the order of the CIT(A) was dismissed.
(2.) THE short question involved in this appeal is as to whether in view of the provisions contained in S. 43B of the Act, the assessee can claim deduction for the sum paid against the customs duty in previous years. In other words, whether the benefit for the sum paid against the customs duty can be claimed in the subsequent year or the benefit of such deduction can only be allowed in the year in which the actual payment is made. The admitted fact, in brief, is that in the assessment proceeding for the asst. year 1988 89 the AO found that the assessee debited a sum of Rs. 3,56,541 in March, 1987, being the customs duty paid in relation to the import of brass scrap weighing 17.443 kg. It was disclosed by the assessee that the aforesaid brass scrap had been shipped from Rotterdam vide bill of lading dt. 7th Jan., 1987. The custom house agent of the assessee was Frakcht Forwardes and through them customs duty of Rs. 2,87,393 was paid in the beginning of March, 1987 and further additional duty of Rs. 69,148 was paid on 27th March, 1987. The aggregate of two amounts comes to Rs. 3,56,541. The assessee thus claimed deduction of the above amount in the asst. year 1988 89 which was not allowed by the AO on the ground, inter alia, that in view of the provisions contained in S. 43B of the Act, the claim of deduction towards payment of customs duty is permissible only in the year in which the actual payment is made. Since the payment was made in the month of March, 1987, the deduction can be claimed in the asst. year 1987 88 and not in the asst. year 1988 89, and thus disallowed the deduction. The assessee being aggrieved with the assessment order preferred an appeal before the CIT(A), Bareilly vide Appeal No. 13/OC(A) MBD/90 91 on the ground inter alia that in the accounts for the year ending on 31st March, 1987, the goods and the customs duty paid has been shown under the 'document in hand' and the customs duty paid was a part of the value of the closing stock but shown under the 'document in hand' as the duty was fully paid only during the relevant previous year and, therefore, the provision of S. 43B of the Act is not at all attracted in the facts of the case. Further the case of assessee respondent was that the goods were finally released on 30th April, 1987, on the payment of additional amount of Rs. 20,530 and, therefore, the customs duty, even though paid partly earlier, should be treated to have been paid during the relevant previous year.
(3.) THE CIT(A), Bareilly, having heard the parties, was of the view that since the cost of goods and the customs duty paid thereon in the preceding year was directly shown in the balance sheet on the assets side, does not preclude the assessee to debit the entire cost of goods along with customs duty to the trading account of the year under appeal after release of goods by the Customs in the month of April, 1987 and, therefore, the provision of S. 43B of the Act is not applicable in the facts and circumstances of the present case. The learned CIT(A) was further of the view that S. 43B applies where the deduction is claimed towards any tax or duty, which has actually been not claimed within the prescribed limits. Since in the case in hand the customs duty was paid in the preceding year in respect of consignment of goods which was actually delivered to the assessee on 22nd April, 1987, relevant to the assessment year in the appeal, the learned CIT (A) was of the view that disallowance of Rs. 3,56,541 does not deserve to be sustained and thus allowed the appeal. The Revenue went in appeal against the aforesaid order of the learned CIT(A) before the Tribunal, who also vide order dt. 11th Feb., 1999, in ITA No. 6796/D/92 upheld the order of the learned CIT(A) dt. 6th July, 1992 and dismissed the appeal. It is against these two above orders this appeal has been preferred by the Revenue.;