Supreme Court sets aside High Court order on unpaid excise duty

The case concerns whether unpaid central excise duty on closing stock of sugar and molasses can be added to the Assessee's taxable income under Section 43B read with Section 145A of the Income Tax Act, 1961, when the Assessee did not claim a deduction for the amount in its Profit and Loss Account.

Who it concerns: Appellant: M/s. Lakshmi Sugar Mills Company Limited; Respondent: Commissioner of Income Tax, Delhi-II; Bench: Justice S.V.N. Bhatti.

What the court decided

• The Court examined whether the High Court's premise that goods were 'admittedly removed' was supported by the record.
• The Court found that the High Court's basis for determining excise duty payability was contrary to the record, unsustainable, and liable to be set aside.
• The Court noted that the Assessing Officer committed a serious error of fact by disallowing the amount based on the incorrect premise of removal.

Also in the document

• The judgment is marked as 'NON-REPORTABLE'.
• The Court explicitly stated that the High Court's finding that goods were removed was contrary to the findings of the CIT (Appeals), the Tribunal, and the AO, which held the stock remained in the bonded warehouse.