1998 (11) TMI 123

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..... s referred the following question for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal correctly construed section 43B of the Income-tax Act, 1961, that when under the provisions of the relevant statute the sales tax though fallen due in the accounting year but was payable after the close of the accounting year it was not open to the Income-tax Officer to di .....

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..... are seized of the matter. Though the issue stands squarely covered by the judgment of the Supreme Court in Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677, yet we deemed it appropriate to clarify the position briefly to eliminate scope for any future misconception. Section 43B which is material for our purpose reads thus : "43B. Certain deductions to be only on actual payment.---Notwithstandi .....

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..... 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 furnished by the assessee along with such return : Provided further... Explanation 1.---.... Explanation 2.---For the purpose of clause (a), as in force at all material times, 'any sum payabl .....

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..... he payment was allowed to be made by the statute within a prescribed time in the subsequent year also. To overcome this, the first proviso was added to section 43B which provided that it will not apply in relation to any sum which is actually paid by the assessee in the next accounting year, if it is paid on or before the due date for furnishing the return of income in respect of the previous year .....

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..... he reference against the Revenue by holding that the Income-tax Appellate Tribunal had correctly construed and interpreted the provisions of section 43B and had rightly held it inapplicable to the case as the assessee had paid the sales tax within the prescribed time under the statute though after the close of the assessment year for which the liability arose.    
Case laws, Decisi .....

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