Ita 151/2016Beforehon’ble Mr. Justice Hrishikesh Royhon’ble Mr. Justice Nelson Sailo v. Commissioner Of Income Tax

ITA 151/2016BEFOREHON’BLE MR. JUSTICE HRISHIKESH ROYHON’BLE MR. JUSTICE NELSON SAILO Heard Dr. Ashok Saraf, the learned Senior Counsel for the appellant (assessee). Also heard Mr. S. Sarma, the learned Standing Counsel for the Income Tax Department representing the Commissioner of Income Tax (CIT).2.It is the joint submission of both lawyers that this case is squarely covered by the recent judgment of 24.11.2016, in the ITA No.4/2014 (Modi Revlon Pvt. Ltd. vs. Commissioner of Income Tax).3.This appeal is under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as �the I.T. Act �), where the assessee challenges the order dated 23.1.2015 (Annexure-IV), in the ITA No.45/Gau/2014, whereby the learned IncomeTax Appellate Tribunal, Guwahati Bench held against the assessee, on their claim to deduction, in respect of the provision of Central Excise Duty and also education chess, for the assessment year 2010-11. Thus the assessment of tax in respect of these provisions, made by the Assessing Officer and the confirmation thereof by the CIT (Appeals), was upheld by the Appellate Tribunal. 4.In the judgment delivered by us in the ITA No.4/2014, the following observations were made by this Court: � & & & & & & & & & & & & & & & 23.The extent of liability of central excise duty payable by the assessee for the assessment year 2009-10, will flow from the final verdict on the legalityof the curtailment notification No.17/2008-Central Excise dated 27.03.2008 and although the notification was quashed in the WP(C) No.1707/2008, the consequential departmental challenge to the verdict of the High Court, is awaiting finalityin the Supreme Court. Thus the precise amount of excise duty payable in the concerned year has remained inconclusive and therefore the reflection of the disputed amount in the books of accounts cannot be said to be an unreasonable act. In our understanding, a prudent assessee following the mercantile system, can certainly make provision for expenditure towards tax liability, even though the assessee may dispute the departmental claim but when the litigation is not yet finalized, it cannot be said with authority that the provision made will never be categorized as expenditure for the concerned assessment year. 24.That apart, if the Supreme Court finally declares that the curtailment notification of 27.03.2008 is legally unsustainable, the revenue will not suffer any prejudice since the department can bring the provisional amount to tax, under Section 41(1) of the IT Act. Therefore we are of the considered opinion that the substantial question of law framed in this proceeding has to be answered in favour of the assessee and against the revenue. Having answered thus, we set aside the respective impugned order(s) dated 13.11.2013, 10.04.2013 and the assessment order dated 23.12.2011, in so far as the disallowance of the central excise provision made in their books of accounts by the assessee. The appeal stands allowed in these terms. & & & & & & & & & & & & & & & �.5. Having regard to the above and noticing the agreement in the Bar, this case is disposed of as one covered by the decision of 24.11.2016, in the ITA No.4/2014 (Modi Revlon Pvt. Ltd. vs. Commissioner of Income Tax). Thus the impugned order of the Income Tax Appellate Tribunal, rendered in the ITA No.45/Gau/2014, in so far as disallowance of the provision made for excise duty and education chess for the concerned Assessment Year, are set aside and quashed.6.With the above order the case is disposed of.