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TMI Blog2015 (5) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... racted. Even if the vend fee that is paid by the respondent to the State does not directly fall within the expression 'fee' contained in Section 43B(a), it would be a 'fee' by 'whatever name called', that is even if the vend fee is called 'privilege' as has been held by the High Court in the judgment under appeal. This being the case, we find that question which was answered in favour of the assessee and against the Revenue by the High Court in Commissioner Of Income-Tax Versus Sri Balaji And Co. [2000 (1) TMI 17 - KARNATAKA High Court ] was not answered correctly. We therefore, set aside the aforesaid judgment and allow the present appeal in favour of the Revenue. In case the respondent has actually paid the aforesaid fee in a previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue preferred a Reference Application before the Income Tax Appellate Tribunal under Section 256(1) of the Act, which referred two questions of law to the High Court. In the present appeal, we are concerned with Question No. 2 which reads as follows: - 2. Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in upholding the deletion of disallowance under S. 43B of the I.T. Act in respect of the vend fee of ₹ 22,87,512/- outstanding as a liability payable to the Government of Kerala as on the last day of the accounting year? Section 43B of the Income Tax Act allows certain deductions only to be on actual payment. Section 43B reads as follows: - 43B. Notwithstanding anything conta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988 with effect from 01.04.1989 shows that sub clause (a) in Section 43B has been considerably widened by the amendment by the addition of the words by whatever name called . It is clear, therefore, that to attract this section any sum that is payable whether it is called tax, duty, cess or fee or called by some other name, becomes a deduction allowable under the said Section provided that in the previous year, relevant to the assessment year, such sum should be actually paid by the assessee. Shri Arijit Prasad, learned counsel appearing on behalf of the appellant, has submitted before us that the judgment under appeal has missed the purport of the 1988 Finance Act amendment to the Income Tax Act. He also claimed that whether a particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e think there is force in the submission made by Shri Arijit Prasad on behalf of the Revenue. First and foremost, he is correct in saying that the impugned judgment does not refer to the amendment made in Section 43B with effect from 1.4.1989 at all. The assessment year with which we are involved on facts in the present case is 1990-1991 which would clearly attract the amendment so made. Secondly, he is also correct in stating that the Karnataka High Court judgment referred to supra, decided a question arising under Section 43B in respect of assessment years 1984-1985, i.e., it was a judgment relating to an assessment year prior to the amendment made on 01.04.1989. It was in these circumstances that the Karnataka High Court held: The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d us to the Notes on clauses which preceded the 1989 amendment which reads as follows: - 21.2 The words tax and duty have been the subject matter of judicial interpretation and there is a controversy as to whether they cover statutory levies like cess, fees, etc. Some appellate authorities have held that such cess or fees cannot be covered by the expressions tax or duty . Such an interpretation is against the legislative intent and, therefore, by way of clarification, an amendment has been carried out to provide that cess or fees by whatever name called, which have been imposed by any statutory authority, including a local authority, will be allowed as a deduction only if these are actually paid. On a reading of the documen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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