The Income Tax Appellate Tribunal (ITAT), Kolkata bench consisting of Rajpal Yadav, Vice-President and Rajesh Kumar, Accountant Member held that there was no appreciation of facts in true perspective and thereby set aside the revision order.

The grievance of the assessee, M/s. R.P. Polypacks Pvt. Limited is that the PrCIT has erred in taking cognizance under section 263 of the Income Tax Act and thereby setting aside the assessment order for passing a fresh assessment order.

The issue according to the Commissioner is that the assessee had made provision of Excise Duty, which was not an allowable expenditure and the Assessing Officer has erred in accepting this claim of the assessee in an assessment order passed under section 143(3) of the Income Tax Act.

The Counsel for the assessee, Vikash Garg submitted that though a provision of Rs.27,14,588/- was made by the assesese, which is reflecting in account as on 31.03.2013 but before filing of the due date of the return. This amount was paid actually in April, 2013.

Hence, no expenditure, for which provision was made, has been allowed by the Assessing Officer. A disallowance under section 43B out of Excise Duty provision could be made if it was not actually paid by the assessee. The moment assessee has actually made the payment, then there is no revenue loss, which ought to have suffered the taxes.

For buttressing this contention, ld. Counsel for the assessee drew our attention to page no. 66, i.e. valuation of closing stock at the end of the year, the due date of filing of the return was on 30th September, 2013. In other words, when accounts are closed on 31.03.2013, a provision was reflected, which has not to be allowed to the assessee. But the moment the provision was actually paid by the assessee on 30.04.2013, nothing left for disallowance out of the Excise Duty expenditure.

The Bench observed that “The expenditure has been allowed to the assessee under section 43B on actual payment before the due date of filing of the return. The Commissioner has committed an error by not appreciating these facts in true perspective.”