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Commissioner Of Income Tax, Delhi Vs. M/s. Maruti Udyog Ltd
January, 17th 2018
$~
*      IN THE HIGH COURT OF DELHI AT NEW DELHI
+                          ITA No. 976/2005
                                      Reserved on: 11th November 2017
                                      Decided on: 7th December, 2017

       COMMISSIONER OF INCOME TAX, DELHI ....Appellant
                   Through: Mr. Ruchir Bhatia, Senior Standing
                            Counsel, Mr. Puneet Rai, Junior
                            Standing Counsel and Mr. Gaurav
                            Kheterpal, Advocate.

                                  versus

       M/S. MARUTI UDYOG LTD.                   ..... Respondent
                     Through : Mr. S. Ganesh, Senior Advocate with
                               Ms. Kavita Jha, Mr. S. Sukumaran,
                               Mr. Anand Sukumar, Mr. Bhuwan
                               Dhoopar, Ms. Roopali Gupta and Mr.
                               Bhupesh Pathak, Advocates.

       CORAM: JUSTICE S. MURALIDHAR
              JUSTICE PRATHIBA M. SINGH
                                JUDGMENT
%                               07.12.2017

Dr. S. Muralidhar, J.:
1. This is an appeal by the Revenue against the impugned order dated
28th March 2005 passed by the Income Tax Appellate Tribunal (`ITAT') in
ITA No.678/Del/2004 for the AY 2000-01.

2. While admitting this appeal on 24th April 2006, the following questions of
law were framed for consideration:


ITA No.976/2005                                                   Page 1 of 5
       "i. Whether Tribunal has rightly interpreted sections 43B and 145A of
       the Income Tax Act, 1961 and is right in impliedly holding that the
       customs duty paid cannot be included in the value of the closing stock
       even if the same has been taken as expenditure in the profit and loss
       account?




       ii.Whether the Tribunal was right in law in not confirming the
       disallowance of Rs.162.33 crores made under Section 43B for want
       of evidence?

       iii.Whether section 43B of the Income Tax Act, 1961 has any
       relevance for computing value of the closing stock and Tribunal is
       right in holding that customs duty paid and allowed as a deduction
       under the aforesaid section cannot be added to the value of the
       closing stock?

       iv.Whether the Tribunal is right in holding that Rs.69,12,41,610/- and
       Rs.52,74,952/- in respect of customs duty paid and debited to the
       profit and loss account cannot be included in the value of the closing
       stock in view of section 43B of the Income Tax Act, 1961?

       v.Whether the Tribunal is right in holding that customs duty of
       Rs.6.25 crore paid on 28.4.2000 can be capitalised with retrospective
       effect and the depreciation can be allowed by including the said
       amount in the AY 2000-01?

       vi.Whether the Tribunal has correctly interpreted Section 14A of the
       Income Tax Act and rightly deleted disallowance of Rs.8.82 crores
       on account of interest under the said provision?

       vii.Whether Tribunal should have been dismissed appeal of assessee
       against the order of the Assessing Officer and upheld by the CIT(A)
       that income from inter corporative deposits, banks and securities is
       taxable under the head 'income from other sources'?

       viii.Whether Tribunal is right in deleting the addition of Rs.53.05
       crore made by the Assessing Officer on account of excess

ITA No.976/2005                                                   Page 2 of 5
       consumption of raw material and inputs on the sole ground of the
       discrepancy in the stock having been accepted by the Excise Tribunal
       as within the tolerance limits?

       ix.Whether the order of the Tribunal deleting the addition of Rs.53.05
       crore is perverse and fails to take into consideration that the said
       discrepancy was noticed in the preceding assessment year and the
       assessee had himself settled the excise claim and paid excise duty of
       Rs.108 crore on the rates prevalent in the assessment year 1999-
       2000?

       x.Whether the Tribunal was right in law in deleting the disallowance
       of Rs.37 crore made under section 43B being the amount of custom
       duty paid on account of discrepancy in the stock register by
       completely disregarding that the duty was relatable to the purchases
       which were not accepted as admissible for the purpose of Income Tax
       Act?

       xi.Whether on a correct interpretation of the Explanation (baa) to
       Section 80HHC (4), the Ld Tribunal is right in holding that the
       Assessee is entitled to reduce the interest paid from the interest
       received for the purpose of deduction under section 80HHC of the
       Act?

3. In view of the decision of this Court today in ITA No. 250 of 2005:

(i) Question (i) is answered in the affirmative i.e. in favour of the Assessee
and against the Revenue.

(ii) Question (ii) is answered in the affirmative, i.e. in favour of the Assessee
and against the Revenue.

(iii) Question (iii) is answered in the negative, i.e. in favour of the Revenue
and against the Assessee by holding that the Tribunal was in error in
concluding the customs duty allowed as deduction under Section 43B of the
ITA No.976/2005                                                      Page 3 of 5
Act may not be added to the total income.




(iv) Question (iv) is answered in the affirmative, i.e. in favour of the
Assessee and against the Revenue.

(v) Question (v) is answered in the affirmative, i.e. in favour of the Assessee
and against the Revenue.

(vi) Question (vi) is answered in the affirmative, i.e. in favour of the
Assessee and against the Revenue.

(vii) Question (viii) is, in view of the decision passed today in ITA No. 31 of
2005, answered in the affirmative, i.e. in favour of the Assessee and against
the Revenue.

(viii) Question (ix) is answered in the negative, i.e. in favour of the Assessee
and against the Revenue.

(ix) Question (x) is answered in the negative, i.e. in favour of the Assessee
and against the Revenue.

4. Question (vii) is answered in the negative i.e. in favour of the Assessee
and against the Revenue in view of the decision dated 31 st March 2008 of
this Court in the Assessee's own case in ITA No. 1711 of 2006. It is pointed
out that the Special Leave Petition against the aforesaid order by the
Revenue being SLP (C) No. 6291 of 2009 was dismissed by the Supreme
Court by order dated 9th April 2009.



ITA No.976/2005                                                      Page 4 of 5
5. Question (xi) is answered in the affirmative, i.e. in favour of the Assessee
and against the Revenue, in view of the decision of the Supreme Court in
ACG Associated Capsules (P) Ltd. v. CIT [2012] 343 ITR 89 (SC).

6. ITA No. 976 of 2005 is disposed of accordingly.




                                                      S. MURALIDHAR, J.



                                                 PRATHIBA M. SINGH, J.
DECEMBER 07, 2017
Rm




ITA No.976/2005                                                     Page 5 of 5

 
 
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