In Brief
Maruti Suzuki appealed challenging the disallowance of Excise Duty deductions and sales tax by the Assessing Officer, Commissioner, ITAT, and High Court. The Supreme Court upheld all prior rejections, holding that unutilised MODVAT credit (a tax credit under the Excise scheme) cannot be claimed as an actual payment or deduction under Income Tax law. Similarly, sales tax set aside in a recoverable account and not yet paid could not be deducted as the assessee could have offset it against sales tax liability. The appeals were dismissed, confirming that tax credits require actual payment and current liability to be deductible."
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