TMI Blog1990 (9) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... ales-tax collected was to be paid in certain instalments after a period of 12 years. The copies of relevant instructions of the Government have been filed by the assessee. According to the subsequent instructions which were issued by the Government in order to remove the difficulties experienced by the industrial units on account of insertion of section 43B in the Income-tax Act, 1961 under which the accrued liability to pay sales-tax was not allowable as deduction in the year in which it was incurred unless it was discharged by payment, the liability to pay sales-tax was to be treated as discharged and the relevant amount was to be treated as interest-free loan payable after period of 12 years. The ITO treated the liability of assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arged on account of specific instructions of the Government to the said effect, it followed that the bar against disallowance contained in section 43B as amended did not operate. In this connection, it is pertinent to refer to instructions of CBDT No. 496 dt. 25-9-1987 (published in 1988, 169 ITR Statute 63) the material portions of which are as follows : " Sales-tax deferral scheme - Provisions of sec. 43B of the Income-tax Act, 1961 Clarification regarding. Several State Governments have introduced sale-tax deferral schemes as a part of the incentives offered to entrepreneurs setting up industries in backward areas. Under these schemes, eligible units are permitted to collect sales-tax and retain such tax for a prescribed period. Afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Bombay Sales-Tax (Amendment) Act, 1987, made the amendment accordingly. The Board have decided that where amendments are made in the sales-tax laws on these lines, the statutory liability shall be treated to have been discharged for the purposes of section 43B of the Act. " In the State of Gujarat, necessary amendments have been made by executive instructions, copies of which have been filed before us. The above instructions of the Board would be applicable as far as applicability of section 43B to the liability of payment of sales-tax to sales-tax deferred scheme. We, accordingly, hold that nothing contained in section 43B justified making of additions in question. We, accordingly, delete the additions. 5. The appeals are allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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