2003 (1) TMI 42

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....see is a private limited company engaged in the business of manufacture of non-ferrous alloys. During the course of assessment, the Assessing Officer noticed that an amount of Rs. 9,90,953 was collected by the assessee. However, it was not credited to the profit and loss account. In reply to a query, the assessee submitted that it had maintained a separate account for sales tax collected, and therefore, Rs. 9,90,953 was not credited to the profit and loss account. It was further argued by the assessee that by maintaining a separate account for sales tax collected, the profit and loss account was not affected. This argument of the assessee was rejected by the Assessing Officer who made an addition of Rs. 9,90,953. Based on this addition, the....

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....for the assessee though served. Findings. We find merit in this appeal. Firstly, section 43B of the Income-tax Act deals with disallowance. That section has no application to the present case. In the present case the assessee, having collected sales tax, failed to pay the same. Secondly, in the case of Allied Motors' case [1997] 224 ITR 677 (SC), the facts were as follows: For the assessment year 1984-85, the assessee filed the return, declaring an income of Rs. 1.91 lakhs. The Income-tax Officer disallowed deduction of Rs. 5.78 lakhs, which was on account of sales tax collected by the assessee for the last quarter of the relevant accounting year ending June 30, 1983. The amount was payable within 30 days from end of the quarter. The dedu....