1998 (4) TMI 157 - AT - Income Tax

Summary

Issues:
1. Whether the addition of a sum as the assessee's income for the assessment year 1990-91 was correctly deleted by the CIT(A)?
2. Whether the disallowance under section 45B of the vend fee payable to the Government of Kerala was correctly deleted by the CIT(A)?

Analysis:

Issue 1:
The first issue raised in the appeal was regarding the deletion of the addition of a total sum of Rs. 46,23,600 as the assessee's income for the assessment year 1990-91. The Revenue contended that the amount should be included in the total income as it accrued to the assessee based on the order passed by the Government of Tamil Nadu on 3rd Feb., 1990. The Department argued that the assessee admitted the accrual of income in the statement of income filed with the return. However, the CIT(A) held that the assessee could only obtain the refund after making a claim and that no refund was received during the previous year. The Tribunal agreed with the CIT(A) that the amount was not income accrued to the assessee for the assessment year 1990-91, as the claim for refund was made only in May 1992, and the amount was received in subsequent years. Therefore, the Tribunal upheld the decision of the CIT(A) in this regard.

Issue 2:
The second issue raised in the appeal concerned the disallowance under section 45B of the vend fee payable to the Government of Kerala. The AO disallowed the deduction claimed by the assessee as there was no payment made on the last day of the accounting year, and the liability was outstanding. The CIT(A) held that vend fee was not in the nature of a tax, duty, cess, or fee envisaged in section 43B and therefore, the disallowance was not justified. The CIT(A) relied on a decision of the Tribunal, Madras C-Bench, in a similar case. The Tribunal concurred with the CIT(A) and upheld the order, stating that the provisions of section 43B were not applicable to the vend fee payable by the assessee. Consequently, the Tribunal dismissed the appeal by the Revenue in this regard.

In conclusion, the Tribunal dismissed the appeal by the Revenue on both issues, upholding the decisions of the CIT(A) in deleting the addition of the sum as income and the disallowance under section 45B of the vend fee payable to the Government of Kerala.