2006 (10) TMI 201 - AT - Income Tax

Summary

Issues: Rectification of assessment order regarding sales-tax expenditure claimed for a different assessment year.

In this judgment by the Appellate Tribunal ITAT Jodhpur, the appellant filed an appeal against the order of the CIT(A) related to the assessment year 1997-98. The appellant had initially claimed an expenditure of Rs. 3,40,498 as sales-tax for the assessment year 1995-96, which was paid during the relevant year for the current assessment. The appellant sought rectification under section 154 of the Act, stating that this claim was mistakenly left unconsidered during the assessment proceedings. However, the AO rejected the application, stating that no such claim was made by the appellant. The CIT(A) also upheld this decision, noting that the challan for payment was not submitted. The tribunal observed that even though the claim was not made in the current year, if it was eligible and could not be made in a previous year, it should be allowed in the year it becomes payable as per section 43B. The tribunal referred to the decision in Berger Paints India Ltd. vs. CIT, emphasizing that deductions under section 43B are allowable on actual payment. Consequently, the tribunal allowed the appeal, directing the AO to rectify the order to allow the relief claimed by the appellant.

This judgment primarily addresses the issue of rectification of the assessment order concerning the sales-tax expenditure claimed for a different assessment year. The tribunal held that even though the claim was not made in the current year, if it was eligible and could not be made in a previous year, it should be allowed in the year it becomes payable as per section 43B. The decision in Berger Paints India Ltd. vs. CIT was cited to support the allowance of deductions under section 43B on actual payment basis. The tribunal emphasized that the claim should be considered based on the year in which it becomes allowable, rather than the year in which it was actually claimed. This ruling highlights the importance of following statutory provisions for deductions and rectifications, ensuring that legitimate claims are not denied based on technicalities related to the timing of claims.