2002 (3) TMI 600 - AT - Income Tax

Summary

Issues:
- Appeal against CIT(A) order for assessment year 1989-90.
- Disallowance of deduction for royalty payment under section 43B.
- Disallowance of opening balance amount.
- Allowance of payment made before due date for filing return.
- Charging of interest under sections 234A, 234B, and 234C.

Analysis:
1. The appellant appealed against the CIT(A) order for the assessment year 1989-90. The main issue was the disallowance of deduction for royalty payment under section 43B. The appellant argued that the opening balance amount of Rs. 1,25,060 from the previous year should not be disallowed under section 43B. The appellant cited the case of Keshrimal Ratanlal v. ITO [1992] 42 TTJ (JP) 660 to support their argument.

2. The appellant contended that the payment of Rs. 1,86,281 made before the due date for filing the return should be allowed as per the first proviso below section 43B. The appellant claimed that this payment should not be disallowed, as it was made on or before the due date under section 139(1).

3. The Tribunal analyzed the submissions and held that the opening balance amount of Rs. 1,25,060 should not be disallowed in the year under appeal. The Tribunal directed that any disallowance related to this amount should be considered in the relevant years. Regarding the payment of Rs. 1,86,281 made before the due date, the Tribunal directed the Assessing Officer to allow the deduction after verifying the evidence of payment by the appellant.

4. The appellant also raised a legal ground challenging the charging of interest under sections 234A, 234B, and 234C. The Tribunal noted that the Assessing Officer had not specified the sections under which interest was to be charged. As there was no mention of charging interest under any section, the Tribunal deleted the interest charged by the Assessing Officer under sections 234A, 234B, and 234C.

5. In conclusion, the Tribunal allowed the appeal of the assessee, ruling in favor of the appellant on the issues of disallowance of royalty payment, allowance of payment made before the due date, and deletion of interest charged under sections 234A, 234B, and 234C.