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TMI Blog1992 (11) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... filing his Income-tax return under section 139(1) is over, can be claimed as a deduction under section 43B even though the assessee follows cash system of accounting as far as sales-tax payments are concerned. 2. The assessee is an individual doing business under the name and style of Andhra Dye Chem Industries, Kurnool. Accounts are maintained for the business. As per the sales-tax assessment order dated 29-3-1990 which is furnished at pages 25 to 29 of the paper book filed on behalf of the assessee, a sum of Rs. 44,213 is the A.P.G.S.T. payable by the assessee for the accounting year relevant to assessment year 1988-89. So also as per the assessment order dated 16-8-1990 furnished at pages 19 to 23 of the paper compilation, the central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es-tax amount is outstanding as per the audit report, the amount is liable to be disallowed. Then the assessee filed a petition seeking to rectify the order of assessment. The Income-tax Officer by his order dated 8-1-1990 refused to rectify and as against this order of the Income-tax Officer an appeal was preferred before the Dy. Commissioner(Appeals). The Dy. Commissioner(Appeals) held that the adjustments which were made by the Income-tax Officer are not contemplated under the provisions of section 143(1)(a) and the assessment made by the Income-tax Officer by which he added the sum of Rs. 20,000 after disallowing it under section 43B is a clear mistake apparent from records and, therefore, he ordered the deletion of the amount from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is particularly drawn to a reported Division Bench decision of this Tribunal to which both of us are parties namely Jeevanlal Narsi Sons v. ITO [1992] 42 ITD 719 (Hyd.). Our particular attention is drawn to the Budget Speech of Hon'ble Finance Minister while introducing section 43B into the Statute Book with effect from 1-4-1984 which is as follows : now found reported at page 31 of 140 ITR (Statutes) : " Several cases have come to notice where tax payers do not discharge their statutory liability such as in respect of excise duty, employer's contribution to provident fund, Employees' State Insurance Scheme, for long period of time. For the purpose of their income-tax assessments, they nonetheless claim the liability as deduction even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rospective effect from 1-4-1984. By virtue of the said Explanation it is enough if the liability to pay sales-tax was incurred in the accounting year. It is not necessary that the whole of the liability should be discharged in the very same accounting year. The word 'any sum payable' occurring in section 43B(a) were interpreted in Explanation 2 inserted by the Finance Act, 1989 with retrospective effect from 1-4-1984. The effect of the Explanation is that payments which were made outside the accounting year also, if permissible under the provisions of the sales-tax law, are governed by the provisions of section 43B. Thus this is another indication to show that section 43B applies to assessees irrespective of the method of accounting they ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fined in Explanation 2 as amounts payable not only during the accounting year but also outside the accounting year provided the liability to pay the same is incurred in the accounting year and that the payment is made within the time allowed under the relevant Statute and also, if the payment is made within the time allowed for filing the Income-tax return under section 139(1). Thus neither section 43B the scope of which is explained by the Finance Minister while introducing the provision under Finance Act 1983 with effect from 1-4-1984, the later provision of Explanation 2 to section 43B, the proviso I inserted by the Finance Act, 1987 with effect from 1-4-1988 nor the interpretation of the said proviso by several High Courts, exclude the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clear evidence to show that for Rs. 20,000 challans obtained on 22-6-1989 as well as 27-7-1989 were furnished along with the income-tax return and, therefore, clear evidence of payment of sales-tax, though paid outside the accounting year were furnished along with the return. Hence proviso No. 1 to section 43B comes to the aid of the assessee especially when we held that the said proviso applies to all the assessees irrespective of the method of accountancy followed by them. 7. In the result, we find that there is no force in the Revenue's contention and hence its appeal is dismissed though not for the same reasons which were recorded by the Dy. Commissioner(Appeals) but for the reasons which are recorded for this year in this order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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