Utilisation of ITC excise duty with output tax, considered as actual payment and allowed as deduction u/s 43B of IT Act

Last updated: 22 August 2022

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The Calcutta High Court has ruled that when a company adjusts its excise duty payable on finished goods with its available Input Tax Credit (ITC) and pays the remaining balance, this constitutes an actual payment. Consequently, no disallowance can be made under Section 43B of the Income-tax Act, 1961, even if the full amount wasn't paid directly. This decision affirms that such adjustments are considered a valid form of payment for tax deduction purposes.

Court :
Calcutta High Court

Brief :
The Hon'ble Calcutta High Court in Principal Commissioner of Income Tax - 1, Kolkata v. M/s. Beekay Steel Industries Limited,[No.- ITAT/177/2021 IA No.GA/1/2021 and IA NO.GA/2/2021] has held that when the assessee adjusted excise duty payable on closing stock of finished goods with available input credit and paid the remaining amount after the said adjustment, would tantamount to actual payment and no disallowance could be made under section 43B of the Income-tax Act, 1961 ("the IT Act").

Citation :
No.- ITAT/177/2021 IA No.GA/1/2021 and IA NO.GA/2/2021

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1 Year PLAN

1999

(Excl. of GST ₹359)

2 Years PLAN

3499

(Excl. of GST ₹629)

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3 Years PLAN

4999

(Excl. of GST ₹899)

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Judgement posted by

Bimal Jain

Service

FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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