JUDGMENT 1. This appeal by the revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act), seeking to raise the following questions for oar examination as questions of law arising out of the order of the Income-tax Appellate Tribunal in terms of its order dated 25-11-2005 passed in ITA No. 4793/MUM/1996 and as having answered the questions erroneously: 1. Whether the Appellate Authorities were correct in holding that the MODVAT credit should not be added to the income as welt as the value of the closing stock for the current assessment year as held by the Assessing Officer. 2. Whether the Appellate Authorities were correct in holding that custom duty paid on goods claimed as irrecoverable and therefore the entire amount of Rs. 9,84,349/- should be allowed as an expenditure despite the assessee not establishing that this amount had become obsolete. 3. Whether the Appellate Authorities were correct in holding that custom duty paid on software and expenses incurred on MRB items should be allowed in full and not at 50% as held by the Assessing Officer and since computer software would become obsolete despite the assessee not producing any proof to claim such obsolescence. The assessee is an Indian company and the assessment year is 1992-93. The assessee had filed its return of income for the assessment year in question, which was examined by the assessing officer and an order was passed under Section 143(3) of the Act on 28-2-1995. In so far as the present appeal is concerned, two aspects of assessment such as an amount claimed by way of MODVAT credit to be reduced from the valuation of closing stock of the assessee for the purpose of ascertaining the profits of the assessee for the accounting period relating to the assessment year in question and the other questions relating to claim towards obsolescence and in respect of the following five items: 2. In so far as the MODVAT credit dispute is concerned, the amount involved was a sum of Rs. In so far as the MODVAT credit dispute is concerned, the amount involved was a sum of Rs. 78,90,593 for the year in question and this amount was sought to be reduced by the assessee from the value of its stock in trade at the end of the accounting year, on the premise that the amount represented the excise duty paid by the assessee in respect of the purchase of inputs which were made use of by the assessee for the purpose of assembling or producing computers, the machinery part of which is popularly known as hardware. This deduction was not allowed by the assessing officer and therefore the amount remained with the value of the closing stock, boosting the profit figure to this extent. 3. In respect of both these aspects, amongst others, the assessee had preferred appeal to the commissioner of Income-tax (Appeals)-XVI, Bombay. The Commissioner in terms of his appellate order dated 28-3-1996, held that the assessing officer should not have rejected the method of accounting employed by the assessee, as it was a standard method of accounting and even as approved by the institute of Chartered Accountants in India and therefore this amount was directed to be deleted, purporting to follow the view taken by the predecessor appellate Commissioner as per the appellate order passed against the assessment order in respect of the very assessee for the earlier assessment year viz., 1991-92. 4. In so far as disallowance of obsolescence claims are concerned, which total a sum of Rs. 58,74,107/- as under: the assessing officer had agreed to the claim of the assessee that an amount of Rs. 20,86,000/- which had been disallowed in the earlier year, was required to be permitted for this year and accordingly, reduced the disallowed obsolescence claims to this extent which resulted in a net disallowance of Rs. 31,88,107/- but the appellate Commissioner was of the view that disallowance up to this extent of Rs. 31,88,107/- also was not justified and therefore directed disallowance up to this extent being set aside and the assessing officer to allow the same. 5. The revenue appealed against this order of the appellate Commissioner to the Income-tax Appellate tribunal, amongst many other contentious issues. 31,88,107/- also was not justified and therefore directed disallowance up to this extent being set aside and the assessing officer to allow the same. 5. The revenue appealed against this order of the appellate Commissioner to the Income-tax Appellate tribunal, amongst many other contentious issues. In so far as these two aspects, which have become subject matter of this appeal, are concerned the tribunal, purporting to follow the view taken by the Income-tax Appellate Tribunal, Mumbai in the case of S.H. Kelkar & Co. Ltd. v. Dy. CIT (1993) 44 ITD 170 (Bom.) and also in the case of Berger Paints India Ltd. v. Dy. CIT (1992) 42 ITD 546 (Cal.) and held that the assessing officer was not justified in adding the amount on account of MODVAT etc., and therefore upheld the view of the appellate Commissioner and dismissed the appeal of the revenue on this aspect. 6. On the question of disallowance on the ground of obsolescence, the tribunal took the view that the understanding and the manner of working out of the extent of obsolescence by the appellate Commissioner was fully justified, having regard to the nature of the business the assessee carried on and the kind of product with which it is dealing with etc. 7. The grounds raised by the revenue on both these issues have gone against the revenue and therefore the revenue is in appeal. 8. Appearing on behalf of the appellant revenue, submission of Sri G Kamaladhar, learned standing counsel, is that the question relating to the so-called addition or otherwise on account of MODVAT credit, has been examined by this court in the case of the very assessee, although for a subsequent assessment year, in ITA No. 811 of 2006 and connected appeals, in terms of judgment dated 17-1-2012 and the matter having been remanded to the assessing officer on this aspect, particularly for giving an opportunity to the assessee to make good its justification for claiming such deduction and in the wake of the provisions of Section 43B of the Act, the result cannot be any different in the present appeal. 9. Sri T. Suryanarayana, learned counsel for the respondent-assessee, on the other hand, submits that the question perhaps could have been more satisfactorily answered in the earlier appeal also, with reference to the judgment of the Supreme Court in the case of Commissioner of Income Tax Vs. 9. Sri T. Suryanarayana, learned counsel for the respondent-assessee, on the other hand, submits that the question perhaps could have been more satisfactorily answered in the earlier appeal also, with reference to the judgment of the Supreme Court in the case of Commissioner of Income Tax Vs. Indo Nippon Chemicals Co. Ltd., (2003) 261 ITR 275 SC , where a situation of the present nature almost identical in all aspects was decided by the Supreme Court against the revenue and in favour of the assessee, particularly for affirming such a view which had been taken by the tribunal and affirmed by the high court and the view having been affirmed, same view should be followed in the present appeal also and therefore absolutely no need for remanding the matter to the assessing officer. 10. For a good measure, Sri Surayanarayana also submits that by oversight or so, the decision has not been relied upon in the other appeals, but now that it is placed before the court, the ruling in this judgment of the Supreme Court fully covers the case. 11. One another aspect highlighted by Sri Suryanarayana is that the question of disallowing of the claims made by the assessee on the MODVAT aspect was also a subject matter in the case of the very assessee for the earlier assessment, year viz., 1991-92 and the reasoning given by the assessing officer for not allowing the same was subject matter of appeal before the appellate Commissioner in CIT(A)XVI/Sp Eg 15/14/94-95 dated 29-3-1995 and the reasoning part of it is forthcoming in this appellate order which has been simply adopted by the appellate Commissioner in the appeal of the assessee for the assessment year in question and with reference to this order, it is justified the correctness of the order passed by the appellate Commissioner for the assessment year 1992-93 also. 12. However, on the question relating to obsolescence etc., Sri Suryanarayana submits that disallowance to the extent of Rs. 12. However, on the question relating to obsolescence etc., Sri Suryanarayana submits that disallowance to the extent of Rs. 9,84.349/- by the assessing officer, as the assessee company having not factually established that this amount has become obsolete, the question may have to be answered in favour of the revenue and the assessee would not seriously contest the matter, as if on fact it had not made good the claim to that extent if the appellate authorities had allowed, no need to go further into this aspect and therefore submits this question could have been answered accordingly, as it is a fact that the assessee hold not placed supporting materials, but as the matter is being remanded to the assessing officer on the first question, to enable the assessee to place materials before the assessing officer on this aspect and claim the benefit of deducting the actual excise duty paid on this aspect, also, the same course of action can be adopted and the second question should be answered accordingly to enable the assessee to place materials before the assessing officer. 13. However, in respect of issues arising out of the third question for our answer, submission of Sri Suryanarayana is that the tribunal and the appellate Commissioner were justified in taking the view that allowance should be 100% in respect of expenditure incurred on MRB items and not 50% as had been opined by the assessing officer and submits that this question should be answered in favour of the assessee and against the revenue. 14. On the third question, Sri Kamaladhar, learned counsel for the appellant-revenue, submits that the assessing officer had opined that the subject materials have some use and therefore if the assessing officer had taken the value in respect of obsolescence to be reduced to 50% due to other use of the material, the appellate authority should not have interfered with etc. 15. We have perused the assessment order and the order of the first appellate authority and the tribunal in the present case and also the assessment order for the assessment year 1991-92 and the appellate Commissioners order, which have been brought to our notice by the learned counsel for the respondent-assessee. 15. We have perused the assessment order and the order of the first appellate authority and the tribunal in the present case and also the assessment order for the assessment year 1991-92 and the appellate Commissioners order, which have been brought to our notice by the learned counsel for the respondent-assessee. The so-called question of MODVAT credit has been examined in some detail by us in the appeals of the revenue relating to other assessment years, though subsequent years of the very assessee and we have found that the reasoning and the rationale of the order passed by the assessing officer is more based on the provisions of Section 43Aof the Act, which is not one of rejecting the method of accounting in terms of proviso to Section 145 of the Act though it is true that the assessing officer uses this phrase and reference and the appellate authorities have also examined the question only from this angle of rejecting the method of accounting followed by the assessee. 16. In the context of the method of accounting to be followed etc., Sri Suryanarayana vehemently urges that the assessee having taken the value of the stocks as net, in the sense without loading the value of stocks with the duty component that the assessee had paid by way of part of purchase price and the assessee having also adopted its initial cost of acquisition net in the sense, without duty component, there is no justification for the assessing officer to have taken the cost of purchases at net, but not allowing the value of stock at net; that in so far as the profit computation for the assessment year is concerned, it does not make any difference whether the computation is on the basis of acquisition being net and value of stock being net or value of purchases being with excise duty and value of stock as such loaded with duty and therefore submits that the appellate Commissioner as well as the tribunal were justified in disallowing the method adopted by the assessing officer and even otherwise submits that the judgment of the Supreme Court in the case of Indo Nippon Chemicals Co. Ltd. (supra) covers the matter. 17. Ltd. (supra) covers the matter. 17. In so far as the judgment of the Supreme Court to be applied or followed is concerned, it can be on two principles viz., on the conventional, traditional, legal principle of a binding precedent if there is any discernible ratio emerging from a decision of a superior court and in so far as the Supreme Court of our country is concerned, the law declared by the Supreme Court which will have to be followed and applied by all courts in the country in terms of the language of Article 141 of the Constitution of India. 18. Unless there is a law declared by the Supreme Court and the meaning of statutory provision is elucidated by a process of interpretation given to a statutory provision, the situation can only be a case of a binding precedent. 19. In so far as tax matters are concerned, each assessment year is different and facts vary from assessee to assessee and a general principle in so far as the method of accounting is not one that emerges, as a general principle of law, producing a ratio of a case that can have a larger or general application to all similar situations. As to what method of accounting one assessee follows, what practices one assessee follows may vary from other assessees. Comparison of the method of accounting followed by one assessee with the method of accounting followed by other assessees is odious. 20. Be that as it may, as we have discussed in the other order pertaining to other assessment years of the very assessee in so far as the dispute relating to the assessee being entitled to deduct the amount from out of its value of stock, an amount that is attributable to the excise duty paid at the time of purchase, is a question directly linked to the purchase price and the duty paid on that and a duty actually paid at the time of purchase. This aspect has been discussed by the assessing officer and though even as pointed out by Sri Suryanarayana, learned counsel for the respondent-assessee that there is considerable confusion as to whose duty liability is sought to be passed on to whom, as to whether the assessee was required to bear some duty or that was the concern of the selling dealer to the assessee or a duty being utilized by the assessee from out of the product sold to its customers, ultimately these things do not reflect into a method of accounting for the purpose of computing profits of the assessee, but only the question is one of duty paid for the purpose of acquisition of raw materials to be consumed in producing finished product. 21. While it is no doubt true that the cost of purchases inevitably to include a duty component in so far as an assessee is concerned, significance of Section 43B of the Act is only that if a deduction is claimed in respect of any tax or duty paid, it should be on actual basis and on making payment. Section 43B does not by itself or per se disallow any value from the cost, but only stipulates condition that if the value of purchases includes a duty component, that should be made good to the hilt. It is for this reason, we have opined that on the principle or requirement of Section 43B of the Act, an assessee was duty bound to make good actual duty it has paid on account of purchases it made and that not having made good anywhere on record, in fact, for the other assessment years also, that is a matter which can be made good as amount claimed, but not in vacuum. 22. We find that the concept of method of accounting as is sought to be applied, particularly in the context of the provisions of section 145 of the Act is more in the nature of a jugglery than a standard method of accounting for the purpose of claiming a duty deduction on the cost of purchases. A duty paid can always he claimed in terms of Section 43B of the Act, but not otherwise as the section mandates it. 23. A duty paid can always he claimed in terms of Section 43B of the Act, but not otherwise as the section mandates it. 23. It is for this reason that we have permitted the assessee to make good that aspect before the assessing officer, particularly as rejection of the assessees claim by the assessing officer virtually amounts to passing a best judgment assessment order in terms of Section 144 of the Act and therefore the assessee should have been given a good and sufficient opportunity to make good its case in the wake of such requirement of law. It is for this reason we answer the first question in favour of the revenue and against the assessee, but deem it proper to remand this matter to the assessing officer on this question, so that the assessee can make good its claim in terms of actual payment etc. 24. We are not applying the reasons adopted by the Supreme Court in the case of Indo Nippon Chemicals Co. Ltd. (supra), as, on facts, we have found this is a case of deduction towards expenditure by way of excise duty being allowed or not allowed depending upon the actual payment and the assessee not making good actual payment by producing proof of payment etc. In our considered opinion, this does not involve any variation in the method of accounting or rejection of the method of accounting followed by the assessee, which, in fact, had not been disturbed, as the assessee was only required to make good the particular deduction on actual basis. We are of the opinion that all authorities under the Act have gone on a wild goose chase in understanding such a denial of deduction of excise duty claimed to have been paid by the assessee while making its purchases of raw materials as a case of rejection of the method of accounting followed by the assessee, which was not the case! 25. In so far as the second question is concerned, as submitted by Sri Suryanarayana, learned counsel for the respondent-assessee, this question is answered in favour of the revenue and against the asseessee and in the negative. 26. 25. In so far as the second question is concerned, as submitted by Sri Suryanarayana, learned counsel for the respondent-assessee, this question is answered in favour of the revenue and against the asseessee and in the negative. 26. In so far as the third question is concerned, we find that the real issue is as to the extent of obsolescence of the products of the assessee, and in the context of the customs duty paid on software and expenditure incurred on MRB claims. We accept the submission of Sri Suryanarayana that the assessing officer having allowed the claim on this aspect, the dispute relating to expenditure, whether at 50% as opined by the assessing officer or 100% as opined by the appellate authorities, and having regard to the fact that the products got obsolete fairly fast in comparison to the other products in other industry and more so even in the computer industry a software having comparatively lessor shelf life or whatever period of utility, as technology is updated regularly, we do not propose to disturb the view taken by the appellate authorities, as we specifically do not find any illegality or error in law on this aspect. The third question is accordingly answered in the affirmative and in favour of the assessee. In the result, this appeal is allowed in part to the extent of questions 1 and 2 answered as above and so far as the first and second questions are concerned, it is remanded to the assessing officer to enable the assessee to place such materials before the assessing officer to justify its claim for deduction in respect of the amounts paid as excise duty on the raw materials purchased, which had been consumed by the assessee for producing the finished products, whether as part of stock-in-trade or had been used by the assessee in products which had become obsolete and in respect of which 100% deduction claim had been allowed and for the accounting period in question. 27. In favour of revenue.