Law:

Section:

Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment - Assessment year 1985-86 - Assessee was held entitled to receive deduction for amount of royalty on basis of fact that such liability had accrued as assessee was following mercantile system of accounting - Revenue's case was that notwithstanding absence of words 'cess or fee' in section 43B(a), prior to amendment in said section with effect from 1-4-1989, said section should be regarded as being applicable in respect of payment of cess and fees well for assessment year 1985-86 when that amendment was not in statute book - Tribunal rejected revenue's case holding that revenue could not be allowed to take advantage of amended provision in order to increase burden of assessee for a prior assessment year - Whether Tribunal was right in holding so - Held, yes K. Subramaniam for the Applicant. JUDGMENT R. Jayasimha Babu, J. - The revenue contends that notwithstanding the absence of the words "cess or fee" in section 43B(a) of the Income-tax Act, 1961, prior to its amendment, which amendment was with effect from 1-4-1989, the section should be regarded as being applicable in respect of payment of cess and fees as well for the assessment year 1985-86 when that amendment was not on the statute book. The Tribunal having rejected that contention, the revenue is in appeal. 2. Prior to an amendment the relevant part of the section referred to, "any sum payable by the assessee by way of tax or duty under any law for the time being in force". After the amendment that provision reads :…

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