Law:

Section:

Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment - Assessment year 1984-85 - Assessee collected certain amount as sales tax in last quarter of previous year but it was statutorily payable in subsequent year - Whether Tribunal was right in law in deleting addition of that amount on account of unpaid sales tax under section 43B - Held, yes CASES REFERRED TO Srikakollu Subba Rao & Co. v. Union of India [1988] 173 ITR 708/ 38 Taxman 272 (AP) and Allied Motors (P.) Ltd. v. CIT [1997]224 ITR 677/ 91 Taxman 205 (SC). Ms. Mona Bhatt for the Applicant. R.K. Patel for the Respondent. JUDGMENT M.S. Shah, J. - In this reference at the instance of the revenue, the following question has been referred for our opinion in respect of the assessment year 1984-85 : "Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 35,272 on account of unpaid sales tax under section 43B of the Income-tax Act, 1961 ?" 2. We have heard Ms. Mona Bhatt, the learned counsel for the revenue and Mr. R.K. Patel, the learned counsel for the respondent-assessee. 3. The controversy pertains to the amount which was collected by the respondent-assessee as sales tax in the last quarter of the previous year but payable statutorily in the subsequent year. The Tribunal had held in favour of the assessee in view of the…

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