Law:

Section:

Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment - Assessment year 1995-96 - Whether furnishing of a bank guarantee in respect of any sum payable by an assessee can be equated with actual payment as required under section 43B for allowance as deduction in computation of profits - Held, no - Whether bottling fees payable for acquiring a right of bottling of IMFL, which is determined under Excise Act and Rules, is neither fee nor tax, but is consideration for grant of approval by Government in respect of exclusive right to deal in bottling of liquor in all its manifestations - Held, yes - Whether, therefore, bottling fee payable under Excise Law for acquiring a right of bottling of IMFL does not fall within purview of section 43B - Held, yes JUDGMENT Dr. Arijit Pasayat, J. - Questioning correctness of the judgment rendered by a Division Bench of the Rajasthan High Court at Jodhpur this appeal has been filed. The questions raised before this Court are as follows : "1.Whether the unpaid amount of Rs. 12,67,656 furnishing of bank guarantee could be allowed as a deduction under section 43B of the Income-tax Act, 1961? 2. Whether the furnishing of bank guarantee can be treated as actual payment for the purpose of section 43B of the Income-tax Act, 1961? 3. Whether the High Court erred in law in not following its earlier decision in CIT v. Rajasthan Patrika Ltd. [2002] 258 ITR 3001 (Raj.) and thereby holding that furnishing of bank guarantee was actual payment? 4. Whether the bottling fee payable by the assessee and chargeable under the Rajasthan Excise Act, 1950 and the Rules framed thereunder being the consideration receivable by the State for parting with its exclusive privilege to deal in potable liquor, was in the nature of any sum payable by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force had to be actually paid in cash or by cheque for claiming deduction under section 43B of the Income-tax Act, 1961? 2. The questions raised before the High Court are as follows: "1. Whether on the facts and in the circumstances of the case the ITAT was…

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