TMI Blog1987 (1) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961 ('the Act') was not justified. The ITO found that the assessee had shown the aforesaid sum of Rs. 23,918 as an amount due to the Sales Tax Department in its balance sheet under the head 'Sundry creditors'. The ITO observed that this amount was collected during the year but not paid during the year and so he added back the said sum invoking the provision of section 43B. 4. The assessee appealed to the Commissioner (Appeals) who confirmed the action of the ITO on the ground that the sales tax collected by the assessee represented a part of its sale proceeds and so the same had to be included in the sales. The sum of Rs. 23,918 remained unpaid as at the end of the previous year because it represented the collection made in the last ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction and so section 43B did not come into play. 6. Shri P. Thiagarajan, the learned representative for the department, on the other hand, supported the order of the Commissioner (Appeals). He stated that the assessee could not maintain one method of accounting relating to a part of sale proceeds and another method of accounting relating to another part of sale proceeds. According to him, sales tax was a part of sales and no separate method of accounting can be adopted in respect thereof. 7. We have considered the contentions of both the parties as well as the facts on record. It is not in dispute that the assessee had not claimed the amount under consideration as a deduction. Hence, section 43B does not apply to the facts of this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not make any difference in the long run. All that has to be seen is whether the unpaid amount was really paid within the statutory date so that it ceased to be income. In other words, even if it is regarded as income, it is to be allowed as expenditure in the year of payment or in the year in which it has become payable under the law. Since the assessee has been following this method of accounting regularly year after year, we do not see any reason to depart from the same during the year under consideration. We find support for this conclusion of ours in the decision of the Special Bench of the Tribunal in the case of American Express International Banking Corpn. v. IAC (1983) 6 ITD 373 (Bom.). Though the sales tax collections are deeme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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