ORDER SHEET ITA NO.12 OF 1999 IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE C.I.T.WB-IV CALCUTTA Versus UNION CARBIDE INDIA LTD. (now Eveready Industries Ltd.) BEFORE: Hon'ble JUSTICE GIRISH CHANDRA GUPTA Hon'ble JUSTICE ARINDAM SINHA Date : 28th January, 2015. For appellant : Mr.M.P.Agarwal,Advocate Mrs.Smita Das De,Advocate For assessee : Mr.C.S.Das,Advocate Court : facts of case will appear from assessment order which reads as follows : In computing business income assessee has deducted Rs.76,73,506/- Excise Duty accrued for 1980 to 1982 on basis of Tribunal s decision in similar case relating to another torch manufacturer. It is submitted that assessee s own case in this regard is still pending before Court. It is submitted that Excise Duty on Brass Torch Casings has been written back in accounts on basis of Tribunal s Judgement in another 2 torch manufacturer s case. Hence there has been no cessation of remission of liability in 1983. Thus provisions of sec.41(1) is not applicable. It is submitted by Authorised Representative that another torch manufacturer is Jeep Torches. assessee has not furnished full facts of another torch manufacturer and citation of Tribunal s decision is also not available. Therefore in absence of facts and citations of case it is difficult to say whether facts of assessee s case and another torch manufacturer is same or distinguishable. Hence deduction claimed by assessee is disallowed. appellate authority concurred with assessing officer holding that assessee was best Judge. When assessee has chosen to take credit there is no reason why sub-section 1 of section 41 should not be applied. assessee approached Tribunal which reversed order of CIT(A). Being aggrieved, revenue has come up in appeal. following question of law was framed at time of admission of appeal: 3 Whether, on facts and in circumstances of case, Income Tax Appellate Tribunal was justified in deleting addition of Rs.2,57,67,544/- being excise duty on Rough Rolled Zinc written back in accounts, under section 41(1) of Income Tax Act, 1961 ? Mr.Agarwal, learned advocate appearing for appellant drew our attention to judgement in case of Polyflex (India) Pvt.Ltd. v. Commissioner of Income-tax reported in (2002) 257 ITR 343 wherein Their Lordships held that Where expenditure is actually incurred by reason of payment of duty on goods and deduction or allowance is given in assessment of earlier period, assessee is liable to disgorge that benefit as and when he obtains refund of amount so paid. Whether there is possibility of refund being set at naught on future date is not relevant consideration. Once assessee gets back amount which was claimed and allowed as business expenditure during earlier year, deeming provision in section 41(1) comes into play and it is not necessary that revenue should await verdict of higher court or tribunal. If higher court or tribunal 4 upholds levy at later date assessee is not without remedy to get back relief. correct way of understanding section 41(1) is to read latter clause, some benefit in respect of such trading liability by way of remission or cessation thereof as distinct and self-contained provision. We are inclined to think that question has squarely been covered by aforesaid judgement. Therefore, question is answered in negative and in favour of revenue. appeal is, thus, disposed of. (GIRISH CHANDRA GUPTA, J.) (ARINDAM SINHA, J.) ssaha AR(CR) C.I.T., WB-IV, Calcutta v. Union Carbide India Ltd. (now Eveready Industries Ltd.)