M/s Devson Private Ltd, Jammu V. The Add. Commissioner Of Income Tax, Jammu

ITA 78/ASR/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1443 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 07-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K V K SINGH
• Assessee Lawyers: V K DEWAN
• Keywords: Opportunity of being heard
• Section: 43B; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (JAMMU CAMP; JAMMU ) BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO. 78(ASR)/2014 ASSESSMENT YEARS: 2007-08 M/S DEVSON PRIVATE LIMITED CHAND NAGAR, JAMMU. PAN: AAACD5815D VS. THE ADDITIONAL COMMISSIONE OF INCOME TAX, RANGE-2, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SH.V.K.DEWAN (ADV) RESPONDENT BY: SH. K.V.K. SINGH (DR.) DATE OF HEARING: 02.12.2015 DATE OF PRONOUNCEM ENT: 10.12.2015 ORDER PER T.S.KAPOOR (A.M): THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF LEARNED CIT(A),JAMMU DATED 3.12.2013 FOR THE ASST. YEAR 200 7-08. THE ASSESSEE HAS TAKEN FIVE GROUNDS OF APPEAL, HOWEVER, THE CRUX OF GRIEVANCE OF ASSESSEE IS THE CONFIRMATION OF ADDITION WHICH THE ASSESSING OFFICE R HAD MADE ON ACCOUNT OF ADVANCE EXISE DUTY PAID BY ASSESSEE. 2. THE BREIF FACTS OF THE CASE ARE THAT THE ASSESSE E IS INVOLVED IN WHOLESALE TRADING OF IMF, DESI WHISKY AND BEER ETC. AND HAD F ILED RETURN OF INCOME ON 2.11.2007. THE CASE OF THE ASSESSEE WAS PICKED UP F OR SCRUTINY. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSRV ED THAT THE ASSESSEE HAD 2. ITA NO.78 (ASR)/2014 ASST. YEAR 200 7-08 REDUCED THE AMOUNT OF RS.6,23,156/- IN THE COMPUTAT ION OF INCOME WHICH WAS ON ACCOUNT OF ADVANCE EXCISE DUTY. THE ASSESSEE WAS REQUIRED TO FILE RELEVANT DETAILS REGARDING CLAIM OF RS,6,23,156/-. IN RESPON SE TO THE ASSESSEE EXPLAINED THAT AMOUNT REPRESENTS THE ADVANCE EXCISE DUTY PAID TO THE DEPARTMENT WHICH WAS OUTSTADNING AS ON 31.3.2007. THE ASSESSEE WAS S HOW CAUSED AS TO WHY THE ADVANCE EXCISE DUTY OF RS.6,23,156/- SHOULD NOT BE DISALLOWED. IN RESPONSE TO THE ABOVE ASSESSEE FILED THE FOLLOWING REPLY: REGARDING ADVANCE EXCISE DUTY:- IT IS SUBMITTED TH AT FOR OBTAINING SUPPLIES OF JK DESI WHISKY, WE ARE REQUIRED TO DEPOSIT EXCISE DUTY IN ADVANCE IN THE GOVT, ACCOUNT AND THEN APPLY TO THE EXCISE DEPARTMENT AND OBTAIN PERMITS FOR TAKING SUPPLIES FROM THE DISTILLERIES. THE AMOUNT OF EXCIS E DUTY IS DEPOSITED IN ADVANCE FROM TIME TO TIME. AN AMOUNT OF RS. 6,23,156/- ON A CCOUNT OF ADVANCE DEPOSIT OF EXCISE DUTY DURING THE YEAR IN THE GOVT, ACCOUNT IS LYING AS CREDIT, BALANCE AS ON 31.03.2007. THOUGH THE LIABILITY OF THE EXCISE DUTY MAY HAVE NOT ARISEN DURING THE YEAR YET THE AMOUNT IS AN ALLOWABLE DEDUCTION U/S 43-B OF THE INCOME TAX ACT. ACCRUAL OF LIABILITY IS NOWHERE MENTIONED AS A COND ITION TO CLAIM DEDUCTION OF STATUTORY LIABILITY U/S 43-B. ONLY ACTUAL PAYMEN T IS TO BE SHOWN. IT IS SUBMITTED THAT DEDUCTION OF ITEMS MENTIONED IN SEC. 43-B ARE TO BE ALLOWED ON ACTUAL PAYMENT BASIS IN THE YEAR IN WHICH SUCH SUM ARE ACTUALLY PAID BY THE ASSESSEE IRRESPECTIVE OF THE YEAR IN WHICH THE LIAB ILITY TO PAY SUCH SUMS WAS ACCRUED. A BARE PERUSAL OF SEC.43B REPRODUCED BELOW CLARIFIES THE POSITION THAT ACCRUAL OF YEAR OF LIABILITY IS IMMATERIAL. THE ASSESSING OFFICER, HOWEVER, WAS NOT SATISFICED WITH THE REPLY OF ASSESSEE AND THEREFORE, HE MADE AN ADDITION OF RS.6,23,156/- BY HOLDING AS UNDER. THE A.R. FURTHER RELIED UPON THE JUDGMENT OF THE H ONBLE ITAT CHANDIGARH SPECIAL BENCH CITED IN (2007) 110 TTJ PAGE 183 IN C ASE DY. COMMISSIONER OF INCOME TAX V/S GLAXO SMITHKLIEN CONSUMER HEALTH CAR E LTD. THE SUBMISSION OF THE A.R. ALONGWITH THE FACTS OF T HE CASE HAVE BEEN CONSIDERED. THE ASSESSEE IS TRADING IN DESI WHISKY. THE ASSESSEE IS REQUIRED TO DEPOSIT EXCISE DUTY IN THE GOVT, ACCOUNT AND THEN A PPLY TO THE EXCISE DEPARTMENT TO OBTAIN PERMITS TO TAKE SUPPLIES FROM THE DISTILL ERIES. THE ASSESSEE HAS GOT BALANCE OF RS. 11,79,123/- AS ON 01.04.2006 IN THE GOVT, ACCOUNT ON ACCOUNT OF EXCISE DUTY. DURING THE YEAR THE ASSESSEE HAS DEPOS ITED AMOUNT OF RS. 13.04 3. ITA NO.78 (ASR)/2014 ASST. YEAR 200 7-08 CRORES ON ACCOUNT OF EXCISE DUTY AND HAS CONSUMED E XCISE DUTY OF RS. 13.09 CRORE ON ACCOUNT OF PURCHASES MADE DURING THE YEAR. AT THE END OF YEAR AS ON 31.03.2007 THE ASSESSEE HAS BALANCE OF RS. 6,23,156 /- IN THE GOVT, ACCOUNT ON ACCOUNT OF EXCISE DUTY DEPOSITED BUT NOT CONSUMED D URING THE YEAR.. THE AMOUNT OF RS. 13,09,55,967/- ON ACCOUNT EXCISE DUTY CONSUM ED HAS BEEN DEBITED TO THE PURCHASE ACCOUNT. BEFORE PROCEEDING FURTHER, IT IS RELEVANT TO REFER TO PROVISION OF SEC. 43-B OF INCOME TAX ACT, 1961, WHICH IS REPRODUCED AS BELOW: - 43B. NOT WITHSTANDING ANYTHING CONTAINED IN ANY OT HER PROVISION OF THIS ACT, A DEDUCTION OTHEIWISE ALLOWABLE UNDER THIS ACT IN RES PECT OF- [(A) ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY, CESS OR FEE, BY WHATEVER NAME CALLED, UNDER ANY LAW FOR THE TIME BE ING IN FORCE, OR] FROM THE READING OF ABOVE PROVISION IT IS CLEAR THA T ANY SUM PAYABLE BY ASSESSEE BY WAY OF TAX/DUTY SHALL BE ALLOWED ON THE PAID BASIS, WHICH IS OTHERWISE ALLOWABLE UNDER THIS ACT. THE ASSESSEE HA S PAID EXCISE AMOUNT OF RS. 13.04 CRORE DURING THE YEAR UNDER CONSIDERATION. AF TER CONSIDERING OPENING BALANCE OF RS.11,79,123/- ON ACCOUNT OF EXCISE DUTY , THE'ASSESSEE HAS CONSUMED EXCISE OF RS. 13.09 CRORE DURING THE YEAR AND HAS L EFT WITH BALANCE OF RS.6,23,156/-. THE ASSESSEE NOWHERE HAS APPLIED FOR PERMIT FROM THE EXCISE DEPARTMENT DURING THE FINANCIAL YEAR 2006-07 TO MAK E PURCHASES FROM THE DISTILLERIES IN RESPECT OF PAYMENT OF RS. 623156/-. THEREFORE, IT CANNOT BE SAID IN THIS CASE THAT THE AMOUNT OF RS. 6,23,156/- IS A DE DUCTION OTHERWISE ALLOWABLE UNDER THIS ACT FOR THE FINANCIAL YEAR 2006-07. IT I S THE FIRST REQUIREMENT FOR ANY SUM TO BE ALLOWED ON CASH BASIS AS PROVIDED IN THE MAIN LIMB OF THE PROVISION OF SEC. 43-B OF I. T. ACT. THE ASSESSEE HAS NOT INCURR ED ANY LIABILITY IN FINANCIAL YEAR 2006-07 IN ITS TRADING ACCOUNT FOR RS. 6,23,156/- A CCORDINGLY. AS ON 31.03.2007 IT IS ONLY THE BALANCE LYING WITH THE GOVT, IN THE EXCISE ACCOUNT. THE ASSESSEE LIAS NOT CLAIM ANY DEDUCTION IN PROFIT AND LOSS ACCOUNT ON THIS ACCOUNT. THE ASSESSEE HAS RELIED UPON THE DECISION OF HONBL E ITAT CHANDIGARH SPECIAL BENCH IN THE CASE OF DCIT V/S GLAXO SMITHLI NE CONSUMER HEALTH CARE LTD., 110 TTJ 183 (2007). IN THIS REGARD, WITH DUE RESPECT TO THE DECISION OF THE HONBLE BENCH, IT IS FURTHER MENTIONED THAT THE YEA R IN WHICH DEDUCTION IN PERMISSIBLE IS TO BE DETERMINED WITH REFERENCE TO T HE YEAR OF PAYMENT. WHEN THE PAYMENT IS MADE IN ADVANCE OF INCURRING THE LIABILI TY, THE DEDUCTION WILL BE PERMISSIBLE IN THE YEAR OF PAYMENT ONLY AFTER THE A MOUNT LYING IN THE EXCISE DUTY ACCOUNT IS ADJUSTED AGAINST THE LABILITY INCURRED B Y THE ASSESSEE. THE SAID CREDIT OF EXCISE DUTY MIGHT HAVE BEEN ADJUSTED THE SUBSEQU ENT ASSESSMENT YEAR WHEN THE ASSESSEE HAS OBTAINED PERMITS FROM THE EXCISE D EPARTMENT TO MAKE PURCHASES FROM-THE DISTILLERIES. AS ON 31.03.2007 I T CAN NOT BE SAID THAT THE 4. ITA NO.78 (ASR)/2014 ASST. YEAR 200 7-08 ASSESSEE HAS MADE PAYMENTS TOWADS INCURRING LIABILI TY FOR EXCISE DUTY. AT THIS STAGE THE ASSESSEE HAS NOT EVEN MADE ANY REQUE ST TO THE EXCISE DEPARTMENT TO ISSUE HIM PERMITS TO THE PURCHASE OF WHISKY FROM THE DISTILLERIES. THE DEDUCTION U/S. 43B OF THE INCOME TAX IS PERMISS IBLE TO THE ASSESSEE IN THE FINANCIAL YEAR IN WHICH THE ADVANCE PAYMENT HAS BEEN ADJUSTED AGAINST THE LIABILITY BECAUSE AT THE MOMENT BOTH THE CONDITIONS OF PAYMENT AND IRRESPECTIVE OF THE PREVIOIUS YEAR IN WHICH LIABILITY HAS BEEN INC URRED STANDS SATISFIED. AFTER THE ACCRUAL OF LIABILITY, THE AMOUNT IS PAID OUT OF ADV ANCE WHEN IT IS ADJUSTED SO. THEREFORE, THE DEDUCTION IS TO BE ALLOWED WITH REFE RENCE TO THE YEAR OF PAYMENT. THE DEDUCTION IS NOT MERELY, PERMISSIBLE TO THE ASS ESSEE ON THE PAYMENT BASIS BUT IT IS PERMISSIBLE BECAUSE THE LIABILITY HAS ACC RUED IN THE SUBSQUENT ASSESMENT YEAR AND THE PAYMENT MADE BY THE ASSESSEE IN ADVANC E HAS BEEN ADJUSTED AGAINST THE LIABILITY. THEREFOE, FROM THE READING O F SECTION 43B ALONG WITH THE EXPLANATION-2 MAKES IT CLEAR THAT NOTWITHSTANDING T HE FACT THAT LIABILITY TOWARDS EXCISE DUTY HAS INCURRED IN THE SUBSEQUENT YEAR, TH E DEDUCTION IS PERMISSIBLE TO THE ASSESSEE IN THE YEAR OF PAYMENT WHEN IT IS ADJU STED AGAINST THE ADVANCE. THE INCURRING OF LIABILITY IS A NECESSARY COMPONENT AS PROVIDED IN EXPLAINATION-2. IN VEIW OF THE THESE FACTS AND DISCUSSION AS ABOVE, AMOUNT OF RS.6,23,156/- CLAIMED BY ASSESSEE UNDER SEC.43B OF INCOME TAX ACT, 1961 IS HEREBY DISALLLOWED AND IS ADDED BACK TO THE TOTAL I NCOME OF THE ASESSEE. I AM SATISFIED THAT THEASSESSEE HAS FURNISHED INACCURATE PATICULARS OF ITS INCOME ON THIS ACCOUNT AND HENCE PENALTY PROCEEDINGS U/S 271( 1) OF INCOME TAX ACT, 1961 ARE HEREBY INITIATED. 5. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE C IT(A), HOWEVER, THE LEARNED CIT(A) ALSO CONFIRMED THE ADDITION BY HOLDI NG AS UNDER: GROUND NO.1 & 3: I HAVE CONSIDERED THE RIVAL CONTE NTIONS IN THE ASSESSMEN ORDER AND SUBMISSION OF THE APPELLANT. THE AO HAS DISALLO WED A SUM OF RS.6,23,156/- PAID AS EXCISE DUTY U/S 43B OF THE INCOME TAX ACT. THE ARGUMENT OF THE AO WAS THAT LIABILITY OF EXCISE DUTY HAD NOT ARISEN DURING THEYEAR UNDER CONSIDERATION. THE ARGUMENTS OF THE APPELLANT IS THAT SECTION 43B STARTED WITH NON OBSTANTE CLAUSE NOTWITHSTANDING ANYTHING CONTAINED..... SO IT OVER RIDES ALL THE PROVISIONS OF THE INCOME TAX ACT AND THEREFORE EVEN PAYMENT TO WARDS FUTURE LIABILITY IS DEDUCTIBLE U/S 43B. SECTION 43-B STATES AS UNDER (A) ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY , CES.... (B) X X X X X (C) X X X X SHALL BE ALLOWABLE (IRRESPECTIVE OF PREVIOUS YEAR I N WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED BY THE ASSESSEE ACCORDING TO THE METHOD OF THE 5. ITA NO.78 (ASR)/2014 ASST. YEAR 200 7-08 ACCOUNTING REGULARLY EMPLOYED BY HIM) ONLY IN COMPU TING THE INCOME REFERRED TO IN SECTION 28 OF THE PREVIOUS YEAR IN WHICH SUCH SUN IS ACTUALLY PAID BY HIM. A CAREFUL READING OF THE ABOVE SECTION CLEARLY SUGGESTS 1) ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX MEANS THE TAX LIABILITY IS ASCERTAINED AND IT IS NOT MERELY AN ADVANCE AGAI NST TAX. SECONDLY, IN THE BRACKET ABOVE IT IS MENTIONED THAT SUCH SUM WAS INCURRED BY ASSESSEE; THE WORD WAS IS VERY IMPORTANT BECAUSE IT REFERS TO THE PAST PREVIOUS YEARS AND NOT THE YEARS WHICH ARE AHEAD OF THE YEAR UNDER REFERENCE. IN VIEW OF THIS, I DO NOT FIND THAT ADVA NCE PAYMENT AGAINST EXCISE DUTY IS ELIGIBLE FOR DEDUCTION U/S 43B. IN THE CASE OF THE CIT VS. KERALA SOLVENT EXTRACTIO NS (2008) 306 ITR 54 (KER) IT IS HELD THAT SALES TAX PAID IN ADVANCE COU LD NOT BE DEDUCTABLE U/S 43-B. IN VIEW OF THE ABOVE THIS GROUND OF APPEAL IS R FEJECTED. 6. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 7. AT THE OUTSET THE LEARNED AR SUBMITTED THAT THE ASESSEE WAS ENGAGED IN THE SUPPLY OF IMFL AND FOR GETTING ANY SUPPLY IT HA D TO DEPOSIT EXCISE DUTY IN ADVANCE AND ONLY THEN IT GETS THE SUPPLY FOR FURTH ER SALE. THE LEARNED AR SUBMITTED THAT SUCH ADVANCE DUTY PAID WAS OUTSTANDI NG AS ON 31.3.2007 UNDER THE HEAD ADVANCE AND WAS NOT CLAIMED IN THE S AID PROFIT AND LOSS ACCOUNT AND THEREFORE, IT WAS CLAIMED IN THE COMPUT ATION OF INCOME AND WHICH WAS IN ACCORDANCE WITH THE LAW AS LAID DOWN BY CHAN DIGARH BENCH IN THE CASE OF DCIT VS GLAXO SMITHKLINE CONSUMER HEALTH CARE LT D. 110 TTJ 183 AND WHICH ITSELF WAS BASED UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF BERGER PAINTS INDIA LTD. VS. CIT 187 CTR 193(SC) . THE LEARNED AR SUBMITTED THAT THE HONBLE TRIBUNAL HAS CATEGORICALLY HELD TH AT THE DEDUCTION UNDER SECTION 43B ON ACCOUNT PAYMENT OF TAX/DUTY ARE LIAB LE IN THE YEAR OF ACTUAL PAYMENT IRRESPECTIVE OF THE YEAR IN WHICH ALLOWBILI TY ARISES. HE SUBMITTED THAT THE HONBEL GUJRAT HIGH COURT IN THE CASE OF LAKHPA L NATIONAL LTD. VS. ITO 54 6. ITA NO.78 (ASR)/2014 ASST. YEAR 200 7-08 CTR GUJRAT AND BOMABY HIGH COURT IN THE CASE OF CIT VS. BHARAT PETROLEUM CORPORATION LTD. 169 CTR BOMBAY AND MADRAS HIGH COU RT IN THE CASE OF CHEMICALS & PLASTIC INDIA LTD. VS. CIT 179 CTR 509 HAS HELD THAT THE DEDUCTION OF TAX, DUTY ETC. IS ALLOWABLE ON THE BAS IS OF ACTUAL PAYMENT BEFORE INCURRING LIABILITY. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD NOT CLAIMED THE SAID AMOUNT OF EXCISE DUTY IN THE NEXT YEAR. 8. THE LEARNED DR, ON THE OTHER HAND, INVITED OUR A TTENTION TO PARA 5 OF PAGE 5 OF ASSESSMENT ORDER AND SUBMITTED THAT IN EA RLIER YEAR ALSO I.E., IN ASST. YEAR 2006-07, THE ASSESSEE HAD OPENING BALANCE OF A DVANCE EXCISE DUTY TO THE TUNE OF RS.11,79,123/-, WHICH IT HAD CLAIMED IN THE PRESENT YEAR 2007-08 ALSO AND THEREFORE, THE ASSESSEE HAD CLAIMED DOUBLE DEDU CTION IN ASST. YEAR 2007- 08 AS ADVANCE PAYMENT IN ASST. YEAR2006-07 AND IN ASST. YEAR 2007-08 ON ACCRUAL BASIS. THEREFORE, HE ARGUNED THAT IN THE SA ME WAY THE ASSESSEE WOULD HAVE CLAIMED THE AMOUNT OF RS.6,23,156/- IN THE NEX T YEAR ALSO. 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE ONLY ISSUE TO BE DECIDED BY US IN THIS APPEAL IS AS TO WHETHER THE EXCISE DUTY WHICH WAS OUTSTAND ING AS ADVANCE AS ON 31.3.2007 IS ALLOWABLE EXPENDITURE IN THE YEAR OF P AYMENT OR IN THE YEAR OF INCURRING OF LIABILITY. WE FIND THAT THE CHANDIGARH BENCH OF TRIBUNAL IN THE CASE OF CIT VS. GLAXO SMITHKLINE CONSUMER HEALTH CA RE LTD. 110 TTJ 183 UNDER SIMILAR FACTS AND CIRCUMSTANCES VIDE PARA 51 & 52 HAS HELD AS UNDER: 7. ITA NO.78 (ASR)/2014 ASST. YEAR 200 7-08 52. WE HAVE CONSIDERED IN DETAIL THE ARGUMENTS OF BOTH SIDES AND THE AUTHORITIES RELIED ON BY THEM; CONSIDERED THE STATUTORY PROVISIONS AS WELL AS; EXAMINED THE EXACT NATURE OF THE ADVANCE PAYMENT OF EXCISE DUTY, ETC. WE HAVE FOUND THAT GENERALLY THOSE PAYMENTS ARE NOT PROVISIONAL OR REFUNDABLE. THEY AR E ACTUALLY PAYMENTS OF CENTRAL EXCISE DUTY. WE HAVE EXAMINED THE LEGISLATIVE INTEN T AND PURPOSE OF SECTION 43B. THE ASSESSEES IN THE PAST WERE; NOT PAYING TAXES, DUTIE S AND OTHER DUTIES TO TH GOVERNMENT IN TIME. AT THE SAME TIME, THEY WERE BOOKING THOSE ITEMS AS EXPENSES IN THEIR ACCOUNTS ON ACCRUAL BASIS ON THE GROUNDTHAT THEY ARE FOLLOWI NG MERCANTILE SYSTEM OF ACCOUNTING. BY DOING SO THEY WERE CLAIMING DEDUCTION: AND REDUC ING THE TAXABLE INCOME. CONCURRENTLY IN MANY CASES, THE ASSESSEES WERE CHAL LENGING THE VERY LIABILITY ITSELF BEFORE THE COURTS AND TRIBUNALS, FINALLY RESULTING THE PAYMENTS BELATED, DEFERRED, AND SOMETIMES NEVER MADE. IN ORDER TO STOP SUCH EXPLOIT ATION PRACTISED BY THE ASSESSEES, SECTION 43B HAS BEEN BROUGHT IN THE STATUTE DECLARI NG THAT 'WELL YOU CLAIM THE DEDUCTION, BUT ONLY ON ACTUAL PAYMENT'. THE LAW HAS MADE IT CLEAR THAT SUCH PAYMENTS ARE TO BE ALLOWED AS DEDUCTIONS IN'THE YEAR OF PAYM ENT. SECTION 43B DOES NOT LAY DOWN ANY SEQUENCE OF ORDER OF EVENTS IN WHICH THE LIABIL ITY HAS TO BE INCURRED AND THE PAYMENT HAS TO BE MADE BY TH ASSESSEE. SECTION 43B DOES NOT LAY DOWN ANY RULE THAT THE LIABILITY TO PAY THE DUTY MUST INCUR FIRST AND ONLY THEREAFTER THE PAYMENT OF SUCH DUTY TO BE MADE SO AS TO CLAIM THE DEDUCTION UNDER JSECTIOH 43B. BUT THE REVENUE TRIES TO MAKE OUT A CASE THAT THE STATUTE HAS PRESC RIBED SUCH AN ORDER OF EVENTS. IN FACT THERE IS NO SUPH PRESCRIPTION IN THE! STATUTE; WE H AVE SEEN THAT THE EXPRESSION 'OTHERWISE ALLOWABLE' REFERS ;TO A DECLARATION OF P ERMISSION IN LAW THAT WHICH ARE AVAILABLE A DEDUCTIONS ON PAYMENT UNDER; SECTION 43 B, ARE THOSE EXPENSES WHICH ARE USUALLY ALLOWED BY THE IT ACT FOR THE PURPOSE OF CO MPUTING INCOME. WE HAVE SEEN THAT THE EXPRESSION 'ANY SUM PAYABLE' DOES NOT MEAN 'PAY MENT OUTSTANDING'. IN THE LIGHT OF THE DECISION OF THE SUPREME COURT IN THE CASE OF AL LIED MOTORS V. CIT (SUPRA), WE HAVE HELD THAT FOR THE PURPOSE OF SECTION 43B THE PROVIS O TO THEREUNDER AND EXPLN. 2 HAVE TO BE READ AND CONSTRUED TOGETHER. 52. THEREFORE, WE HOLD THAT THE DEDUCTION FOR TAX, DUTY ETC. IS ALLOWABLE UNDER SECTION 43B OF THE IT ACT, 1961 ON PAYMENT BASIS BE FORE INCURRING THE LIABILITY TO PAY SUCH AMOUNTS. ACCORDINGLY, THE FIRST QUESTION IS AN SWERED IN AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE. WE FIND THAT FACTS AND CIRCUMSTANCES OF THE PRESENT CASE ARE PARI MATERIA TO THE FACTS AND CIRCUMSTANCES OF M/S GLAXO SMITHKLINE CON SUMER HEALTH CARE LTD., THEREFORE, THE CLAIM OF THE ASSESSEE FOR ALLOWING T HE DEDUCTION ON ACCOUNT OF PAYMENT OF ADVANCE EXCISE DUTY IN THIS YEAR ON THE BASIS OF PAYMENT IS ALLOWABLE EXPENDITURE, HOWEVER, TO EXAMINE AS TO WH ETHER THE ASSESSEE AGAIN IN 8. ITA NO.78 (ASR)/2014 ASST. YEAR 200 7-08 SUCCEEDING YEAR HAS NOT CLAIMED THE AMOUNT AS DEDUC TION THE CASE IS REQUIRED TO BE REMITTED BACK TO THE ASSESSING OFFICER WHO ON THE BASIS OF RECORDS OF SUCCEEDING YEAR WILL EXAMINE AS TO WHETHER THE ASSE SSEE HAD AGAIN CLAIMED THE ADVANCE EXCISE DUTY OF RS.6,23,156 OR NOT. IN CASE SUCH CLAIM HAS NOT BEEN CLAIMED IN THE SUCCEEDING YEAR, THE CLAIM IS ALLOWA BLE IN THE PRESENT YEAR AND IF THE ASSESSEE HAD CLAIMED AGAIN IN SUCCEDDING YEAR T HEN THE CLAIM IS NOT ALLOWABLE IN THE PRESENT YEAR, THEREFORE, THE APPEA L IS REMITTED BACK TO ASSESSING OFFICER TO EXAMINE THESE FACTS. NEEDLESS TO SAY THAT THE ASSESSEE WILL BE PROVIDED SUFFICIENT OPPORTUNITY OF BEING HEARD. 10. IN VIEW OF THE ABOVE, THE APPEAL FILED BY TH E ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER, 2015. SD/- SD/- (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 10.12.2015 PK/PS COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.