- . 100 2004 Income tax Appeal No of 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ----- Income-tax Appeal No. 100 of 2004 Date of decision: 21.7.2010 Commissioner of Income-tax-I, Ludhiana --- Appellant Versus M/s. Arihant Industries Ltd. Ludhiana --- Respondent --- CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- PRESENT: Mr. R.P. Sawhney, Senior Advocate with Mr. for the appellant-Revenue. --- AJAY KUMAR MITTAL, J. - . 100 2004 Income tax Appeal No of 2 260 This appeal filed under Section A of the - , 1961 ( “ ) Income tax Act for short the Act” at the instance of - the Revenue is directed against the order of the Income tax , ‘ , ( Appellate Tribunal Chandigarh Bench B’ Chandigarh for “ ) 16.9.2003, - short the Tribunal” passed on in Income tax . 1128/ /98, 1992- Appeal No CHANDI for the assessment year 93. The assessee company sends goods for processing . , to its processing house While getting the goods back the assessee pays excise duty and such duty increases the cost , , of the manufactured and processed goods and thus becomes . , , part of the sale price The assessee however does not increase the value of the closing stock by the amount paid on account of excise duty and yet claims deduction under 43 . Section B on the basis of actual payment For the 1992-93, assessment year the assessee filed return declaring . total income as Nil The return was processed under Section 143(1)( ) a of the Act and assessment was completed vide 25.1.1995 order dated after allowing depreciation and - . brought forward depreciation to the extent of Rs - . 100 2004 Income tax Appeal No of 3 2,86,73,294/-. It was noticed during the course of assessment proceedings that the assessee had claimed 43 .20,14,444/- deduction under Section B amounting to Rs on account of excise duty paid and mentioning it as . recoverable The assessee claimed that amount as its loss in , and that too in respect of the goods which had not been . sold and were lying with it in its closing stock The assessing officer disallowed the deduction so claimed by the . assessee on the aforesaid count The view of the assessing officer was upset in appeal carried by the assessee and the Commissioner of - ( ) [( “ ( ) ], Income tax Appeals Ludhiana in short the CIT A ” vide 21.7.1998 order dated deleted the disallowance claimed under 43 , . , Section B made by the assessing officer While doing so ( ) , . . the CIT A observed that earlier as well i e for the 1984-85 1985-86 assessment years and in the case of the , assessee itself the same question had arisen for consideration before the Tribunal and the Tribunal had ordered the exclusion of the excise duty paid but not claimed as . deduction from the value of the closing stock - . 100 2004 Income tax Appeal No of 4 This is how the matter came to be carried before . , the Tribunal at the instance of the Revenue The Tribunal after following its own decision in the case of the assessee , 1985-86 1986-87, itself for the assessment years and ( ), 16.9.2003. upheld the order of the CIT A vide order dated It is all that prompted the Revenue to file the instant appeal proposing that the following substantial question of law arises : for determination by this Court “ Whether in view of the circumstances and facts of , - the case the Hon’ble Income tax Appellate Tribunal erred in deleting the disallowance made by the . 20,14,444/- Assessing Officer amounting to Rs on account of excise duty claimed as deduction but ? not included in the value of closing stock Learned counsel for the parties are agreed , that the Tribunal while hearing the appeal carried at the 1992-93 instance of the Revenue for the assessment year - . had relied upon its own decision in Income tax Appeal Nos 912, 652 1408/ /89 and Chandi rendered in the case of the - . 100 2004 Income tax Appeal No of 5 present assessee itself pertaining to the assessment years 1985-86 1986-87 , 16.9.2003, and and had vide order dated ordered exclusion of the excise duty paid but not claimed as , deduction from the value of the closing stock and out of - . 573 575 . which Income tax Reference Nos to had arisen It . 1 3 has been further agreed that question Nos and raised in those References are similar to the one proposed in this . appeal The counsel also agreed that in view of decision of the apex Court in of the apex Court in . CIT vs Alom . (2009) 319 306 ( ) Extrusions Ltd ITR SC , and order of this Court in - . 573-575 1993 Income tax Reference Nos of ( - - , . / . Commissioner of Income tax I vs M s Arihant Industries . ) Ltd Ludhiana , , of even date the issue stands concluded . , against the Revenue Accordingly the substantial question proposed in this appeal is decided against the Revenue and . in favour of the assessee . The appeal stands disposed of accordingly (AJAY KUMAR MITTAL) JUDGE - . 100 2004 Income tax Appeal No of 6 (ADARSH KUMAR GOEL) July 21, 2010 JUDGE *rkmalik*