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2007] 291 ITR 473 [2008] 172 TAXMAN 274 (ALL.) HIGH COURT OF ALLAHABAD Commissioner of Income-tax, Lucknow v. Enterprises India* R.K. AGRAWAL AND VIKRAM NATH, JJ. IT REFERENCE NO. 52 OF 1999 JANUARY 12, 2007 Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment - Assessment year 1987-88 - Whether in view of Supreme Court's decision in Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677/ 91 Taxman 205 , Tribunal was justified in holding that first proviso to section 43B, inserted by Finance Act, 1987 with effect from 1-4-1988, was retrospective in operation, being clarificatory in nature and, therefore, directing to restrict disallowance under section 43B, out of sales-tax collections made during year, to an amount which had not been paid in succeeding year within time allowed under aforesaid proviso and relevant sales-tax laws - Held, yes CASE REVIEW Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677/ 91 Taxman 205 (SC) followed. CASES REFERRED TO Jamshedpur Motor Accessories Stores v. Union of India [1991] 189 ITR 70/ 54 Taxman 521 (Pat.) [Para 2] and Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677/ 91 Taxman 205 (SC) [Para 4]. A.N. Mahajan for the Applicant. ORDER 1. The Income-tax Appellate Tribunal, Allahabad Bench, Allahabad has referred the following question of law under section 256(1) of the Income-tax Act, 1961 for opinion of this Court:- "Whether, on the facts and circumstances of the case, the I.T.A.T. was legally justified in holding that the first proviso to section 43B, inserted by the Finance Act, 1987 with effect from 1-4-1988, was retrospective in operation being clarificatory in nature, and thereby directing to restrict the disallowance under section 43B, out of sales-tax collections made during the year, to an amount which has not been paid in the succeeding year within the time allowed under the aforesaid proviso and the relevant sales-tax laws. ?" 2. The reference relates to the assessment year 1987-88. Briefly stated the facts giving rise to the present reference are as follows:- In the accounts of the assessee, there was an outstanding sales-tax liability of Rs. 2,01,800…

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