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Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment - Assessment year 1987-88 - Whether where outstanding amount of sales tax has been paid beyond accounting year but within grace period allowed under relevant provisions of Sales Tax Act, deduction under section 43B cannot be denied - Held, yes CASE REVIEW Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677 (SC)followed & relied upon. CASES REFERRED TO CIT v. Bimal Mrishna Sil & Bros. [1992] 108 CTR (Cal.) 197 and Allied Motors (P.) Ltd. v. CIT[1997] 224 ITR 677/91 Taxman 205 (SC). J.K. Singhi for the Applicant. Mahendra Gargia for the Respondent. JUDGMENT 1. On an application filed under section 256(1) of the Income-tax Act, 1961 ('the Act'), the Tribunal has referred the following question for the opinion of this Court : "Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the addition made under section 43B notwithstanding the fact that the assessee did not make the payment of outstanding sales tax liability during the previous year relevant to the assessment year 1987-88 ?" 2. The assessee is a registered firm and had claimed liability on account of sales tax amounting to Rs. 85,788, which was disallowed by the Assessing Officer on the ground that the payment was made after the close of the accounting year. The relevant assessment year is 1987-88. In appeal, the Commissioner (Appeals) has upheld this disallowance. In appeal before the Tribunal, the Tribunal has allowed the claim of the assessee following the decision in CIT v. Bimal Mrishna Sil & Bros.[1992] 108 CTR (Cal.) 197. Mr. Gargia, the learned counsel for the assessee, submits that now the issue has been concluded by the Apex Court that if the liability of sales tax has not been paid before the due date but paid as provided in proviso to section 43B of the Act, which clarifies that if the amount of sales tax has been paid after submission of returns but within the grace period allowed under the relevant provisions of the Sales Tax Act, the deduction under section 43B cannot be denied. 3. In Allied Motors (P.) Ltd.…

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