- (1.) WE have heard the learned counsel for the parties.
(2.) IN this appeal against the judgment of Tribunal, Jodhpur Bench, Jodhpur dt. 30th March, 2001 [reported as Dy. CIT vs. Udaipur Distillery Co. Ltd. (2002) 74 TTJ (Jd) 193--Ed.] following two questions were framed as substantial questions of law involved in the appeal vide order dt. 15th Feb., 2002 : (1) Whether, on the facts, and in the circumstances of the case, the Tribunal was justified in holding that the unpaid amount of bottling fee has, on furnishing of the bank guarantee, to be treated as actual payment and accordingly, allowing the deduction in respect of the same under s. 43B of the Act, even though the sum has not been actually paid before the due date of filing the return under s. 139(1) of the Act. (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in allowing depreciation on research and development assets which related to the closed business of fast food division/unit of the assessee-company and as such not used during the previous year." The question No. 1 dwells on the claim of assessee-respondent for deduction of amount of bottling fee payable under the Rajasthan Excise Act, 1950, and relevant Rules framed thereunder, liability for which was incurred during the accounting period relevant to asst. yr. 1992-93, claim was made on the basis of accounts maintained on mercantile system. During the course of hearing, it transpired that the claim of deduction on account of liability incurred for paying bottling fee during accounting period relevant to the asst yr. 1992-93, which is subject-matter of this appeal, has been sought to be denied on the ground that it being a fee, unless it is actually paid, when it is payable, deduction in respect thereof cannot be allowed during the relevant assessment year when the liability was outstanding. For this purpose, the AO drew support from the provisions of s. 43B of the Act of 1961, as it existed w.e.f. 1st April, 1989. Two-fold contentions were raised in support of claim of deduction before the Tribunal on behalf of assessee : firstly that bottling fee is not a fee in its technical sense as an impost and part of taxation scheme, but is a consideration receivable by the State for parting with its exclusive privilege to deal in potable liquor in all its manifestations and the same does not fall within the purview of s. 43B. Such liability which is of revenue in nature is allowable as deduction when such liability is incurred irrespective of its payment on due date. Alternatively, it was also urged that since the assessee was required to furnish bank guarantee, in a pending litigation wherein the validity of liability was under challenge, the bank guarantee must be deemed to be actual payment so as to satisfy the condition of s. 43B. But the Tribunal has decided the issue in favour of assessee on the latter contention and the first contention of the assessee has not been answered notwithstanding it was raised before the Tribunal. Under such circumstances, the assessee urged before us that even if the question No. 1 is decided against him, he is entitled to relief on second contention raised by him.
(3.) THE second contention raised by him also raises substantial question of law which goes to the root of the controversy and arises out of the Tribunal's order. THE assessee is entitled to seek sustaining of Tribunal's order on the alternative ground which was urged before the Tribunal but was not decided by it. In the facts and circumstances of the case we are satisfied that following substantial question of law also arises in this appeal for consideration and it is required to be decided for deciding the appeal on merits on the contentions raised by the parties before the Tribunal as well as before us : "(1A) Whether, in the facts and circumstances of the case, bottling fees chargeable from the assessee under the Rules framed under the Rajasthan Excise Act, 1950, and interest chargeable on late payment of bottling fees, amounts to tax, duty, cess or fees within the meaning of s. 43B of IT Act, 1961, so as to attract the said provisions while considering allowability of deduction of such expenses." In D.B. IT Appeal No. 8/2002--CIT vs. Udaipur Distillery Co. Ltd. [reported at (2004) 186 CTR (Raj) 1--Ed.] the respondent in this case also, in which same issues were raised in respect of asst. yr. 1988-89. This Court vide its judgment dt. 3rd Sept., 2003, has answered the question No. 1 holding that furnishing of bank guarantee cannot be treated equivalent to actual payment. Therefore, if the bottling fee is to be considered as "fee" in its technical sense, requirement of s. 43B are not fulfilled. ;