TMI Blog2001 (4) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of sales tax is paid within the time allowed under the sales tax law, although after the close of the year, it shall be allowed as deduction?" The facts relevant for determining the aforesaid question are that the assessee has claimed deduction on account of the liability to pay sales tax amounting to Rs.37,826 which had not been actually paid during the previous year relevant to the assessment year in question. The assessee has claimed that as per the relevant sales tax law, the assessee has incurred the liability for the previous year and the payment of said sum was also made within the time allowed for such payment under the provisions of the Sales Tax Act before the submission of a return in time. He, according to law governing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law for the opinion of this court, the Tribunal noticed that there is a conflict of opinion between various High Courts, the Delhi High Court supporting the view of the Revenue, whereas other High Courts have held in favour of the assessee and has referred the aforesaid question, as a question of law for the opinion of this court. We have heard learned counsel for the parties. Section 43B inserted by the Finance Act, 1983, with effect from April 1, 1984, reads as under: "S. 43B. Certain deductions to be only on actual payment. -Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of- (a) any sum payable by the assessee by way of tax or duty under any law f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with such return:... Explanation 2.-For the purposes of clause (a), as in force at all material times, 'any sum payable' means a sum for which the assessee incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law." It reveals that the proviso has been added to section 43B that nothing contained in section 43B shall apply in relation to any sum referred to in clause (a) which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee according to the method of accounting regularly employed by him only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him. Therefore, Explanation 2 which governs the meaning of expression "any sum payable" under clause (a) would refer to the payability of tax by the assessee not on the basis of the due date for its payment but with reference to incurring of liability to pay and ordinarily such rule would prevail. The proviso referred to above carves out an exception to the operation of clause (a) read with Explanation 2 giving meaning to the expression "any sum payable" used thereunder in the strict letter of law, with the object of mitigating the hardship to wide ampli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closes, then on payment of such tax within the period provided under the relevant taxing statute, it would still be allowable deduction, and clause (a) has been construed accordingly. That view has been expressed by the Gujarat High Court in CIT v. Chandulal Venichand [1994] 209 ITR 7; the Calcutta High Court in CIT v. Sri Jagannath Steel Corporation [1991] 191 ITR 676; and by the Patna High Court in Jamshedpur Motor Accessories Stores v. Union of India [1991] 189 ITR 70, without multiplying the instances it may be noticed that the Madhya Pradesh High Court, the Andhra Pradesh High Court and the Rajasthan High Court have also expressed the similar views. The Delhi High Court in Escorts Ltd. v. Union of India [1991] 189 ITR 81, had taken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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