Income Tax Act, 1961
Section 43B—Income tax deduction on excise duty claim—Whether constitute double deduction—Excise duty paid and included in the closing stock has to be claimed separately as a deduction otherwise appellant would not be claiming the entire excise duty paid in the year of its payment—Section 43B of the Income Tax Act, which came to be introduced from Assessment Year 1984-1985 onwards, provides that excise duty would be deductible only on the payment basis in the year in which it is actually paid—Assesse was correct in submitting that excise duty in case of unsold stocks held by them at the end of previous year is not treated as expenses in the accounts, but has been separately claimed and allowed in the income tax assessments—While computing the total income for assessment year 1986-1987, assesse had claimed a deduction of excise duty amounting to Rs. 2,08,08,346 actually paid in the year 1985 and included in closing stock less excise duty paid and included in closing stock of 1984 already claimed, amounting to Rs. 1,47,08,920—Tribunal was not correct in coming to a conclusion that this amount of Rs. 60,99,426 would amount to double deduction.
[Paras 5 & 6]