The Supreme Court on 27 October 2026 allowed Lakshmi Sugar Mills’ appeal and removed a ₹69.92 lakh addition concerning unpaid excise duty on closing stock retained in a bonded warehouse.
Judge / Bench — Justices S.V.N. Bhatti and N. V. Anjaria; judgment by Justice S.V.N. Bhatti.
The Court found that the Delhi High Court incorrectly assumed the goods had been removed. The company had neither routed the disputed amount through its profit and loss account nor claimed it as a deduction. A tax auditor’s remark alone did not justify disallowance under Section 43B of the Income Tax Act. The Revenue failed to show how the entry reduced taxable income. The Court set aside the High Court order, restoring the position upheld by the Commissioner (Appeals) and Tribunal.
Advocates appearing — Appellant assessee — Memoon Zehra, Advocate; respondent Revenue — S Dwarakanath, Additional Solicitor General.