If prior period expenses include excise duty, payment of such duty is eligible for deduction u/s 43B

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If prior period expenses include excise duty, payment of such duty is eligible for deduction u/s 43B
An issue before Ahemdabad bench of ITAT in the case of DCIT Vs Adani Wilmar Ltd
Was as to whether if prior period expenses can include excise duty, payment of such duty is eligible for deduction u/s 43B
The tribunal rules in favour of assessee and Revenue’s appeal was dismissed.
Short Overview of the case:
DCIT Vs Adani Wilmar Ltd
ITA No.1761/Ahd/2016
With
CO No.133/Ahd/2016
The assessee company engaged in the business of manufacturing/refining, export and trading of edible oil, seeds and cakes, pulse and grains.
The assessee for relevant year, had claimed an expense under the head prior period item for Rs. 8,35,560/- in its profit and loss account.
Such prior period item was representing the excise duty with respect to waste, Spent Earth generated during the manufacturing process.
The assessee during the assessment proceedings admitted that such expenses pertains to the earlier year but the same was allowable on payment basis under section 43B of the Act.
 However, the AO disagreed with the contention of the assessee by observing that the assessee was very much aware about such liability in the year of its incurrence.
Therefore the assessee should have claimed the deduction of such expenses in the year in which it was crystallized. Accordingly the AO disallowed the claim of the assessee and added the sum of Rs. 8,35,560/- to the total income of the assessee.
On appeal, CIT(A) deleted the addition made by the AO. Being aggrieved the revenue had filed appeal before Tribunal.
On appeal, Tribunal held that,
On appeal issue was Whether if prior period expenses can include excise duty, payment of such duty is eligible for deduction u/s 43B. ITAT observed as under:
++ there is no ambiguity to the fact that such item of prior period expenses represents the excise duty paid by the assessee in the year under consideration. Similarly, the provisions of section 43B, being overriding section, provides to allow the deduction to the assessee on payment basis with respect to certain items including the excise duty.
As the assessee has paid the excise duty, pertaining to the earlier year, in the year under consideration, such payment of excise duty is eligible for deduction in the current year.
The case law referred by the AO, Saurashtra Cement and chemicals industries Ltd the principles of it are not applicable to the present facts and circumstances as the issue therein was in relation to the expenses other than the expenses covered under section 43B of the Act whereas the issue on hand relates to the deduction of excise duty which is an allowable deduction under the provisions of section 43B of the Act.
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