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Interpretation of section 43B of the Income-tax Act, 1961 regarding applicability to the assessee's case and inclusion of impugned amount in the hands of the assessee for the assessment year 1984-85. Analysis: The case involved the interpretation of section 43B of the Income-tax Act, 1961, concerning the applicability to the assessee's case and the inclusion of an impugned amount in the hands of the assessee for the assessment year 1984-85. The Income-tax Officer added a sum of Rs. 38,061 to the income of the assessee under section 43B as the sales tax collections were not paid during the accounting year. However, the Commissioner of Income-tax (Appeals) held that section 43B was inapplicable and deleted the disallowance. The matter was appealed before the Income-tax Appellate Tribunal by the Revenue, which upheld the decision of the Commissioner of Income-tax (Appeals). The Tribunal ruled that section 43B would apply only if the tax accrued and became due for payment in the accounting year and was not paid within that period. Therefore, the section was deemed inapplicable in this case, and the impugned amount was not includible in the assessee's tax liability. The Tribunal's decision was based on the provisions of section 43B as they stood before subsequent amendments introduced by the Direct Tax Laws (Amendment) Act, 1987, the Finance Act, 1988, and the Finance Act, 1989. The court noted that these amendments, particularly the insertion of Explanation 2 by the Finance Act, 1989, with effect from April 1, 1984, significantly altered the legal position. As a result, the court declined to answer the question referred to it by the Tribunal and directed the Income-tax Appellate Tribunal to reconsider the appeals and decide them afresh in accordance with the amended provisions of section 43B. The court's decision was consistent with its earlier ruling in similar cases, emphasizing the need for the Tribunal to apply the amended provisions of section 43B to determine the proper law applicable to the instant cases. By declining to answer the question directly, the court instructed the Tribunal to revisit the appeals and make decisions based on the updated legal framework provided by the amendments to section 43B. The judgment underscored the importance of applying the law as amended by subsequent legislation to ensure the correct interpretation and application of tax provisions in specific cases. In conclusion, the court disposed of the reference by directing the Income-tax Appellate Tribunal to reconsider the appeals in light of the amended provisions of section 43B and decide the matters afresh in accordance with the updated legal requirements. The court's decision was guided by the need to align the interpretation of tax laws with the latest legislative changes to ensure consistency and accuracy in tax assessments and determinations.
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