JUDGMENT 1. - This appeal under Section 260A of Income Tax Act, 1961 is directed against the order dated 13.8.2001 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur in Income Tax Appeal No. 2071/JP/92 pertaining to assessment year 1990-91.At the time of admitting the appeal on 24.5.2002, following three questions were framed as substantial questions of law arising out of the order of the Tribunal for consideration in this appeal : (i) "Whether on the facts and in the circumstances of the case the ITAT was justified in directing the Assessing Officer to recompute the short term capital Loss considering the land charges (lease charges) of Rs.19,50,136/- paid by the assessee company forming part of the cost of asset instead of talking capital gain of Rs.10,89,000/- by wrongly holding that such charges have already been allowed by the assessing officer himself in consequential order dated 22.1.1992 in Assessment Year 1989-90 because no such claim was allowed in order dated 22.1.1992 and further that the land charges were paid by the company for its closed business and hence not allowable? (ii) Whether on the facts and in the circumstances of the case the ITAT was justified in deleting the addition of Rs.7 lacs by holding that unpaid amount of bottling fee has, on furnishing of bank guarantee, to be treated as actual payment and accordingly the deduction in respect of the same cannot be denied under section 43 of the I.T. Act, 1961? (iii) Whether on the facts and in the circumstances, of the case the ITAT was justified in deleting the addition of Rs.8,31,313/- lacs made by the Assessing Officer on account of disallowance of land scapping expenses not covered u/s (1)(iv) of the I.T. Act, by wrongly relying on the decision in ITA No. 1546/JP/95 dated 30.3.2001?" 2. So far as question No. 2 is concerned, it relates to disallowance of claim to deduction of liability to pay bottling fees and interest accrued thereon as business expenses by referring to Section 43-B(1)(a) of the Income-Tax Act, 1961 (for short 'the Act of 1961') because the amount of bottling fee was not actually paid during the previous year relevant to Assessment Year in question. 3. This question was subject matter of D.B. Income Tax Appeal No. 35 8/2002 which related to the Assessment Year 1988-89 in the case of same assessee. 3. This question was subject matter of D.B. Income Tax Appeal No. 35 8/2002 which related to the Assessment Year 1988-89 in the case of same assessee. During the course of hearing the court found that the following 1 substantial question of law also arise for consideration of the claim of the assessee and which has been accepted by the Tribunal, for deduction of amount of bottling fees which became payable under the Rajasthan Excise Act, 1950 which was not actually paid by the end of the previous year 5 relevant to assessment year in question and has not been actually paid during that period. "Whether in the facts and circumstances of the case bottling fees chargeable from the assessee under the Rules framed under the Rajasthan Excise Act, 1950 and interest chargeable on late payment 7 of bottling fees, amounts, to tax, duty cess or fees within the meaning of Section 43B of the I.T. Act, 1961 so as to attract the said provisions while considering allow ability of deduction of such expenses." 4. The said question is also required to be framed in this appeal as the dispute is identical between the same parties. Accordingly the aforesaid 15 question is also framed as question No. 2A in this appeal. 5. Answers to Question No. 2 and 2A are not governed by the decision of this Court in D.B. Income Tax Appeal No. 8/2002 which has been decided on 3.9.2000. 6. The question No. 2 relates only to the question whether the bank 2(' guarantee to be treated equivalent to actual payment and accordingly, the deduction in respect of the bottling fee, if it is treated to be the same cannot be denied under Section 43B of the I.T. Act, 1950. "In D.B. Income Tax Appeal No. 8/2002 CIT v. Udaipur Distillery Company Limited , the respondent in this case also, in which same 25 issues were raised in respect of assessment year 1988-89. This court vide its judgment dated 9.2003 has answered the question No. 2 in the present case by holding that furnishing of bank guarantee cannot be treated equivalent to actual payment. Therefore, if the bottling fee is to be considered as 'Fee' in its technical sense, requirement of Section 3o 438 are not fulfilled. This court vide its judgment dated 9.2003 has answered the question No. 2 in the present case by holding that furnishing of bank guarantee cannot be treated equivalent to actual payment. Therefore, if the bottling fee is to be considered as 'Fee' in its technical sense, requirement of Section 3o 438 are not fulfilled. However, on newly framed question No.2A, this Court has decided that looking to the nature of charges and provision of levy of taxation scheme under Article 265 after considering number of decisions of Hon'ble Supreme Court bottling fee is not a fee in its technical senseas part of taxation, but is a consideration for parting with exclusive privilege of State to deal in potable liquor. It was said that bottling fee was charged from the respondent-assessee by the State Government by way of consideration for parting with its exclusive privilege to bottle liquor, whether as part of manufacturing process or for facilitating its sale, it does not alter its character from price charged by the State for parting with its exclusive privilege of bottling potable liquor as one of the manifestations to deal in potable liquor to a charge by way of 'Fee' as an impost as a facet of taxation as defined in Article 366(28). Consequently, if the assessee maintain his books of account as per mercantile system, he is entitled to claim deduction of such expenses incurred by him by way of bottling fee for the accounting period when it becomes payable to the State Government as consideration. Such liability is allowable deduction as an expenditure in the year in which it is so incurred even if actual payment is deferred, Section 43B is not attracted in such case." 7. So far as the question No. 3 is concerned, there is factual error in describing the expenses as land scabbing expenses. in fact the dispute related to the depreciation claimed by the assessee in respect of assets of the Research and Development of the assessee's business, which were disallowed by the Assessing Officer by treating the Research and Development department of the assessee as a closed business, but has been held as allowable expenses by the Tribunal. in fact the dispute related to the depreciation claimed by the assessee in respect of assets of the Research and Development of the assessee's business, which were disallowed by the Assessing Officer by treating the Research and Development department of the assessee as a closed business, but has been held as allowable expenses by the Tribunal. Accordingly the question No. 3 as modified reads as under: "Whether on the facts and in the circumstances of the case the ITAT was justified in deleting the addition of Rs.8,31,313/- lacs made by the Assessing Officer on account of dis-allowance of depreciation of assets of R & D are not covered under Section 34 of the I.T. Act by wrongly relying on the decision of the ITA No. 1546/JP/995 dated 30.3.2001"? 8. The question No. 3 has also arisen before this court in the case of the assessee for the assessment year 1992-93 and 1993-94. The decision of D.B. Income Tax Appeal No. 78/2001, which related to assessment year 1992-93. The Division Bench noticed that as per the finding of the Tribunal, the assessee was not carrying on business of fast food alone but was also engaged in the business of potable liquor which is still in existence, therefore, the Research and Development Division of the assessee, which was meant for liquor business also, cannot be considered to be a closed department of the assessee. Therefore, the expenses related to Research and Development cannot be considered as expenses related to a closed business. The said decision was then followed in D.B. I.T. Appeal No. 11/2002 decided on 18.11.2003. 9. Following the aforesaid decisions, we hold that no interference is called for in the conclusions reached by the Tribunal that additions of R5.8,31,313/- made by the Assessing Officer on account of disallow-ability of depreciation of assets of the Research and Development Division was justified and does not called for any interference. 10. The question No. 1 relates to the claim of the assessee for computation of capital loss on account of the acquisition of the land and building of the assessee under Section 269A of the Income Tax Act by the Central Government. The assessee has received consideration for the aforesaid acquisition amounting to Rs.68,93,800/-. The value of land and building taken altogether of the fast food Division was arrived at Rs.584,170/-. 11. The assessee has received consideration for the aforesaid acquisition amounting to Rs.68,93,800/-. The value of land and building taken altogether of the fast food Division was arrived at Rs.584,170/-. 11. The assessee has claimed Rs.19,50,136/- to be added to the book value of assets as capitalised expenses on account of the land charges or the lease money paid by him for the land in question as part of cost of acquisition/improvement of the said assets. 12. In fact, the assessee has claimed the short term capital loss of Rs.22,45,443/- for the assessment year 1990-91. However, there is no dispute that out of the said amount of Rs.12,34,755/- related to the claim of the assessee to capital loss arising out of transfer of Fast Food Division to Delhi, which was transferred in 1989-90 which at the time of filing of return for the Assessment Year 1990-91 stood disallowed and were included in the Assessment Year in question. The claim to capital loss for the Assessment Year 1990-91 related to transfer of immovable properties relating to its Bombay business which had been acquired by the Central Government under Section 269A. 13. The narration of the aforesaid facts became necessary on noticing that the Tribunal has in that regard followed the reason that weighed with it in computation of capital loss for the assessment year 1989-90. 14. It was felt necessary that before embarking to decide this question, the actual controversy raised and decided in the year 1989-90 is known, we directed the learned counsel for the parties to produce the order dated 22.1.92 pertaining to assessment year 1988-89 which is purported to have been followed by the Tribunal for drawing parallel between the computation of capital gains/loss in respect of transfer of Fast Food Division at Delhi and Bombay 15. For the assessment year 1989-90 in the first instance, the assessee has claimed a capital loss of Rs.12,34,755/- on account of transfer of his Fast Food Division at Delhi. There is some discrepancy about the actual claim of capital loss viz. Whether it is Rs.12,34,755/- or Rs.11,26,265/-, with which we are not concerned for the present purposes. It may be noticed that in the first 1J instance, the Assessing Officer disallowed the capital loss in its entirety by holding that no capital loss could be allowed in respect of a closed business. Whether it is Rs.12,34,755/- or Rs.11,26,265/-, with which we are not concerned for the present purposes. It may be noticed that in the first 1J instance, the Assessing Officer disallowed the capital loss in its entirety by holding that no capital loss could be allowed in respect of a closed business. However, on appeal before the CIT (Appeals), it was pointed out that since it Was a claim of capital gains/loss which has to be computed under Section of the Income Tax Act, 1961 on account of transfer of capital assets, the existence or non existence of particular business as on the date of transfer is not relevant and the result of the transfer of the property will have to be arrived at and computed in accordance with the provision of computing capital gains/loss under the I.T. Act, 1961, the CIT set-aside the order of Assessing Officer and directed the Assessing Officer to re-compute the 2 capital loss after taking into account all relevant factors.From the order of the CIT (Appeals) it appears that the assessee's computation read as under: W.D.A. 18, 75,136/- Less: Sale Price 7,48,871/- __________ 10, 96,265/- __________ W.D.A. of Expenses 1,38,490/- Capitalised in 1984-85 12,34,750/- 16. Apparently, no question was raised or decided in the proceedings for assessment year 1989-90 relating to the capitalisation of land charges paid by the assessee after the closure of the Fast Food Division, Delhi, nor the determination of capital gain for Assessment Year 1989-90 related to acquisition of the assets acquired by the Government under Section 269UD but was concerned with transfer of fast food division as a whole. 17. The Income Tax Officer in assessment order dated 23.3.92 while computing the result of acquisition of land and building of the assessee during the course of assessment for the Assessment Year 1990-91 opined that the land charges or the lease money cannot be added to the cost of acquisition so as to reduce the capital gains to capital loss. He was of the 45 opinion that since the land and building were subject matter of acquisition and written down value of both the assets was already in the books of the assessee, the same were to be taken as cost of acquisition. He was of the 45 opinion that since the land and building were subject matter of acquisition and written down value of both the assets was already in the books of the assessee, the same were to be taken as cost of acquisition. Accordingly, from the consideration received by the assessee was deducted from the book value of assets acquired and balance Rs.10,89,630/- was held to be capital gains arising out of such transfer. Against this computation of capital gains arising from transfer of land and building Rs.59,291/- was adjusted as capital loss arising from the transfer of one heavy vehicle. This resulting in the net capital gains at Rs.10,30,839/-. 18. This order was affirmed by the CIT (Appeals) vide his order dated 9.9.92. 19. However, the Income Tax Appellate Tribunal vide its order under appeal examined the issue as if the assessing officer has disallowed the claim of capital loss on the grounds similar to those which prevailed while computing capital loss claimed on sale of assets of fast food Division. Delhi in the earlier Assessment year 1989-90, which was also disallowed in to the first instance but ultimately recomputed by the Assessing Officer in pursuance of the Appellate Order passed by the CIT (Appeals) for the Assessment Year 1989-90 arising out of the transfer of assets of Fast Food Division to Delhi. This be gathered from the following observations made by the Tribunal: "The dis-allowance, under consideration in this appeal, pertains to FFD, Mumbai involving identical facts in as much as the land charges paid in respect of both the units (Bombay and Delhi) and claimed as forming part of cost of assets were not allowed by A.O. For the reason that the same related to closed business. It is observed that such charges have already been allowed by A.O. himself in his aforesaid consequential order dated 22.1.92 while computing the short-term capital loss on sale of FFD, Delhi as convened by the contention of Ld. A.R. of the assessee to the effect that the A.O. has allowed the loss in similar circumstances in his consequential order passed on 22.1.92 for A.Y. 1989-90." 20. We have noticed above that no such contention about capitalisation of the land charges which were paid in respect of the assets of a closed business was either raised or decided by any of the authorities in the assessment year 1989-90. 21. We have noticed above that no such contention about capitalisation of the land charges which were paid in respect of the assets of a closed business was either raised or decided by any of the authorities in the assessment year 1989-90. 21. The Tribunal apparently misdirected itself in assuming on representation made by learned counsel for the assessee, that the claim was disallowed earlier for the like reason for assessment year 1989-90 and was subsequently allowed for the same reasons now claimed by the assessee in respect of transfer of Assets of Bombay business during the previous year relevant to Assessment year 1990-91. From the aforesaid narration it is apparent that there is no comparison between the issues raised in two Assessment Years about transfer of capital assets in respective Assessment Year 1989-90 on the one hand and Assessment Year 1990-91 on the other and the question whether land charges claimed by assessee to be part of cost of acquisition so as to warrant reading conclusion by parity of reasons was not considered and decided by the Tribunal, by erroneous assumption of parity of facts between two cases. 22. In the present case for assessment year 1990-91 the Assessing Officer has given his reasons for not allowing the expenses in question to be as treated as cost of acquisition by capitalisation the expenses as one for acquisition of assets in question. 23. The learned counsel for the respondents has contended before us that even the cost in regard to the maintenance for keeping the rights of the assessee alive in the assets by paying the land charges amounts to the cost so of acquisition of land and building and, therefore, ought to have been included in the cost of acquisition. No advertence to this aspect of the matter have been made by the Tribunal. 24. Since, the tribunal has not considered the relevant material that 1 may be on record for deciding the issue on merit in coming to a finding about the nature of the expenses claimed by the assessee to be the part of the cost of the acquisition of assets in question, we deem it just and proper that the issue is first addressed by the Tribunal itself and it gives a definite finding on the issue considering all the aspects. factually as well as on law on the contentions raised before it. 25. factually as well as on law on the contentions raised before it. 25. As a result of the aforesaid discussion while we hold that on consideration of material on record on question No. 2 and 2A, the provisions of Section 43(B) are not attracted to the liability of assessee to pay bottling fee under the Rajasthan Excise Act, 1950 which accrued during the period in question as it cannot be termed as tax, fee or cess and, therefore. notwithstanding the finding that the bank guarantee can not be treated as actual payment as defined under Section 43B of the Income Tax Act, the assessee is entitled to claim deduction of the liability towards bottling fee 15 accrued during the relevant period as part of its business expenses under Section 37 of the Act of 1961. 26. On considering Question No. 3, we hold that the assessee is entitled to claim depreciation in respect of the assets of Research and Development Department, which is not closed and it pertains to its entire business which included not only the fast food which has since been closed but also the business of the manufacture and sell of liquor which is still in operation. 27. On considering question No. 1, as a result of aforesaid discussion, we hold that the Tribunal was not justified in recording its finding about the 25 inclusion of Rs.19,50.136/- as part of cost of acquisition of the land and building acquired under Section 269UD while computing the capital gains/loss arising but of such transfers solely on the basis of Assessment Year 1989-90. The Tribunal is directed to reconsider the entire issue in its correct perspective on facts as well as on law and record its conclusion in 30 that regard, afresh. 28. The appeal is, accordingly. allowed in part. There shall be no orders as to costs. *******