Law: Income Tax Act, 1961

Section: 43B

Income-tax----Business expenditure---Deduction only on actual payment---Insertion of first proviso to S.43-B w.e.f. 1-4-1988---Is declaratory of pre-existing law and is procedural in nature---Does not affect vested rights---Amended provisions of S.43-B applicable to assessment year 1984-85---Indian Income Tax Act, 1961, S.43-B---[Sanghi Motors v. Union of India (1991) 187 ITR 703 (Delhi) dissented from]. The first proviso to section 43-B of the Income Tax Act, 1961, is declaratory of pre-existing section 43-B, effective from April 1, 1984, and does not affect vested rights. It is explanatory of the provisions and is procedural in nature. Therefore, the amended provisions of section 43-B are applicable to the assessment year 1984-85 though the said amendment was effective from April 1, 1988. Sanghi Motors v Union of India (1991) 187 ITR 703 (Delhi) dissented from: CIT v. Chandulal Venichand (1994) 209 ITR 7 (Guj); CIT v. Dhiraj Kumar & Co. (1997) 226 ITR 443 (MP); CIT v. Edcons (India) (Pvt.) Ltd. (1992) 198 ITR 86 (Cal); CIT v. Polar Fan Industries Ltd. (1992) 197-ITR 718 (Cal); CIT v. Shree Tax Co. (1997) 226 ITR 445 (MP); CIT v. Sri Jagannath Steel Corporation (1991) 191 ITR 676 (Cal) and CIT v. Vinar Systems (Pvt.) Ltd. (1993) 203 ITR 756 (Cal) fol. Channan Singh v. Jai Kaur (Smt.) (1970) AIR 1970 SC 349; CIT v. Mohansingh & Sons (1995) 216 ITR 432 (MP); CIT v. Uttamachand Sahirajam (1996) 220 ITR 517 (MP); ITO v. Habibullah (S.K.) (1962) 44 ITR 809 (SC); Jamshedpur Motor Accessories Stores v. Union of India (1991) 189 ITR 70 (Patna); Kanumarlapudi Lakshminarayana Chetty v. ITO (First Addl.) (1956) 29 ITR 419 (AP); Kundan Lal v. ITO (1959) 37 ITR 337 (Punj); New York v. United States 326 US 572 and Parashuram Pottery Works Co. Ltd. v. ITO (1977) 106 ITR 1 (SC); (1997) AIR 1977 SC 429 ref. JUDGMENT A. R. TIWARI, J.---The aforesaid miscellaneous civil cases, presented by the Commissioner of Income-tax, Bhopal, under section 256(2) of the Income Tax Act, 1961 (for short "the Act"), contain the common question, as extracted below, and categorised by the applicant as one of law, for a direction to the Tribunal to start the cases and refer the same for our…

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