TMI Blog2005 (9) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed in rule 6D should be applied to each tour individually but to all tours made during the relevant year consolidated together?" "Whether Tribunal was right in denying the deduction of subsisting liability by invoking provisions of section 43B, although the section was neither invoked by the lower authorities nor was the ground urged in appeal petition of the Revenue?" - - - - - Dated:- 15-9-2005 - Judge(s) : D. A. MEHTA., MS. H. N. DEVANI. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.-These are cross references filed by the Revenue for the assessment years 1983-84 and 1984-85, and the assessee for the assessment year 1984-85. The Income-tax Appellate Tribunal, Ahmedabad Bench "C", has referred the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly following the mercantile system of accounting. Mrs. M.M. Bhatt appearing on behalf of Mr. M.R. Bhatt, learned senior standing counsel for the applicant-Revenue, contended that once the Tribunal had come to the conclusion that the amount of luxury tax collected by the assessee was its trading receipt, it could not have granted any deduction thereof as the assessee had not discharged any liability under the statute. That, in fact, the assessee had challenged the constitutional validity of the Luxury Tax Act and the matter was pending before the apex court. That, as the apex court had granted stay against the operation of the statute, subject to certain conditions, the assessee could not claim that any statutory liability had accrued. She ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction to the customer to retain the original bill till disposal of the matter pending before the apex court. In the light of the aforesaid position and the facts found by the Tribunal, it is apparent that the stay granted by the apex court was conditional to the detriment of the assessee concerned to the extent that it could not retain the amount collected from the customers on disposal of the matter. In case the assessee failed in its challenge before the apex court, it was required to make the payment to the State Government in accordance with the statute. On the other hand, if the assessee succeeded, as per the undertaking filed before the apex court, it was required to return the amount to the customers. Therefore, in any event, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly but to all tours made during the relevant year consolidated together?" Mrs. M.M. Bhatt has very fairly invited attention of the court to the decision of the apex court in the case of Allied Motors P. Ltd. v. CIT [1997] 224 ITR 677, to submit that question No. 1 is required to be answered in favour of the assessee and against the Revenue. Accordingly, question No. 1 for the assessment year 1984-85 is answered in the affirmative, i.e., in favour of the assessee and against the Revenue. The Tribunal was justified in law in holding that, if unpaid sales tax liability and municipal tax pertaining to the last quarter of the accounting period is paid within the time stipulated for filing the return of income under section 139(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dave, the learned advocate appearing on behalf of the assessee, submitted that the provisions of section 43B of the Act had never been pressed into service by either of the authorities and the Tribunal had, for the first time, on its own, invoked the same, while holding that the assessee's liability to pay luxury tax could not be allowed as a deduction on the basis of system of accounting, but had to be allowed only on actual payment in the light of the provision of section 43B of the Act. It is not disputed that the provision is applicable for the assessment year in question, i.e., the assessment year 1984-85. Once that is the position, while determining the tax liability of the assessee under the Act, all the relevant provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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