BERGER PAINTS INDIA LTD. versus COMMISSIONER OF INCOME TAX, CALCUTTA

Citation: [2004] 2 S.C.R. 502 · Decided: 17-02-2004 · Supreme Court of India · Bench: K.G. BALAKRISHNAN · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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A 
BERGER PAINTS INDIA LTD. 
v. 
COMMISSIONER OF INCOME TAX, CALCUTT A 
FEBRUARY 17, 2004 
B 
[K.G. BALAKRISHNAN AND B.N. SRIKRISHNA, JJ.] 
Income Tax Act, 1961: 
Section 43 B-Deduction allowed to assessee-Interpretation of-
..:w· 
c 
I 
Pr[nciple laid down by Gujarat High Court in Lakhanpal National Ltd's 
case followed in judgments of Madras High Court and Bombay High Court 
and in the decision of Special Bench of the Income Tax Appellate Tribunal, 
none of which was challenged-Held, if the Revenue has not challenged the 
correctness of the law laid down by the High Court and has accepted it in 
D case of one assessee, then it is not open to the Revenue to challenge its 
correctness in the case of other assessees, without just cause-It cannot be 
said that judgment of Gujarat High Court was distinguishable as being one 
rendered in connection with a provisional assessment under Section 141-A 
and not in a regular assessment. 
E 
Section 261-Certificate to appeal-High Court departing from the 
uniform view taken by other High Courts-Held, in view of this, a certificate 
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to appeal ought to have been granted-Practice and Procedure. 
..... 
During assessment proceedings for the assessment year 1984-85, 
F assessee claimed that under Section 43 B of the Income Tax Act, 1961, it 
was entitled to deduction of the entire amount actually paid on account. 
of customs and excise duty during the relevant previous year. On similar 
basis, assessee claimed a deduction of the actual amount of customs and 
excise duty included in the value of the closing stock for the previous year 
pertaining to the assessment years 1986-87 and 1987-88 and offered for 
G tax the amount of customs and excise duty included in the value of the 
opening stock. 
The Inspecting Assistant Commissioner of Income Tax allowed the 
assessee's claim in the proceedings for the assessment year 1984-85. The 
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H 
Commissioner of Income Tax initiated proceedings under Section 263 of 
502 
\ 
BERGER PAINTS INDIA LTD. v. C.I.T. 
503 
the Act on the ground that the Assessing Officer had wrongly allowed the A 
claim for deduction of the amount towards customs and excise duty paid 
during the previous year but credited to the Profit and Loss Account in 
closing stock of goods under the provisions of Section 43B. The assessee 
relied upon the judgment of the Gujarat High Court in Lak.hanpal National 
Ltd. 's case in support of its claim. The Commissioner of Income Tax took 
the view that the Gujarat High Court's decision was distinguishable on B 
facts and therefore, made an order under Section 263 of the Act 
disallowing the claim of the assessee. The Tribunal confirmed the order 
of the Commissioner of Income Tax. On an application made under 
Section 256(1) of the Act at the instance of the assessee, the Tribunal 
referred a question of law for the opinion of the High Court as to whether C 
the Tribunal was right in law in rejecting the assessee's claim for 
deduction. The High Court answered the reference in favour of the 
Revenue and against the assessee. 
For the assessment years 1986-87 and 1987-88, the Tribunal upheld 
the claim of the assessee and allowed deduction claimed under Section 43 D 
B of the Act, as Central Excise and Customs duty, which had been included 
in the value of the closing stock. At the instance of the Revenue, two 
references were made to the High Court as to whether the Tribunal was 
justified in allowing the deduction as aforesaid. The High Court answered 
both the references in favour of the Revenue and against the assessee. E 
Hence, the present appeals. 
Allowing the appeals, the Court 
HELD: 1.1. It is an established principle that ifthe Revenue has not 
challenged the correctness of the law laid down by the High Court and F 
has accepted it in the case of one assessee, then it is not open to the Revenue 
to challenge its correctness in the case of other assessees, without just 
cause. (508-G-H] 
Union of India v. Kammudini Narayan Dalal, 249 ITR 219 SC; CIT v. 
Narendra Doshi, 254 ITR 606 SC and CIT v. Shivsagar Estate, 257 ITR 59 G 
SC relied on. 
1.2. The decision in Lakhanpai National Ltd. 's case which clearly laid 
down the interpretation of Section 43 B was followed by the judgments of 
the Madras High Court and Bombay High Court and was again followed 
by the decision of Special Bench of the Income Tax Appellate Tribunal, H 
504 
SUPREME COURT REPORTS 
[2004] 2 S.C.R. 
A none of which have been challenged. There is no

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