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2015 (6) TMI 850 - AT - Income TaxDisallowance of sales-tax liability u/s.43B - CIT(A) deleted the disallowance - Held that:- Ministry of Law has opined that if the State Governments make an amendment in the Sales Tax Act to the effect the sales tax deferred under the scheme shall be treated as actually paid, such a deeming provision will meet the requirements of section 43B. This circular has been explained by the Tribunal in the case of Morvi Horologial Industries v. ITO (1990 (9) TMI 121 - ITAT AHMEDABAD-C), CIT v. K.N.Oil Industries (1996 (7) TMI 101 - MADHYA PRADESH High Court) and CIT v. Gujarat Polyerete Pvt. Ltd. (1999 (3) TMI 17 - SUPREME Court) Reading of these decisions suggests that provisions of Circular No.496 would apply only if a State Government had amended its Sales Tax Act to provide that the sales tax that the deferred under an incentive scheme framed by it would be treated as actually paid, so as to meet the requirements of section 43B of the Income-tax Act. The facts undisputed are that the assessee is having manufacturing unit in Karnataka. Karanataka Government had amended the Sales Tax Act for providing deferment of the Sales Tax liability and to treat the said sales tax collected as loan for use of the assessee Company, CIT(A) is perfectly justified in deleting the addition on account of deferment of sales tax. - Decided against revenue.
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