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Unutilised ITC not deductible as expense as it can't be said to be actually paid by the assessee as per Sec. 43B: SC

February 10, 2020[2020] 114 129 (SC)

INCOME TAX : Unutilised credit under MODVAT scheme does not qualify for deductions under section 43B

• Deductions under section 43B are allowable only when sum is actually paid by assessee. In instant case, Excise Duty leviable on appellant on manufacture of vehicles was already adjusted in the concerned assessment year from the credit of Excise Duty under the MODVAT scheme. The unutilised credit in the MODVAT scheme cannot be treated as sum actually paid by the appellant. The assessee when pays the cost of raw materials where the duty is embedded, it does not ipso facto mean that assessee is the one who is liable to pay Excise Duty on such raw material/inputs. It is merely the incident of Excise Duty that has shifted from the manufacturer to the purchaser and not the liability to the same.

• (Maruti Udyog Ltd. v. Commissioner of Income-tax, Delhi [2017] 88 98 (Delhi) - Affirmed)
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