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TMI Blog2001 (10) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the provision of section 43B - Both the questions, therefore, referred to us are answered in the affirmative, i.e., in favour of the assessee and against the Revenue. - - - - - Dated:- 16-10-2001 - Judge(s) : M. S. SHAH., D. A. MEHTA. JUDGMENT The judgment of the court was delivered by D.A. Mehta J.- The Income-tax Appellate Tribunal has referred the following two questions at the instance of the Revenue, under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion of this court: "1. Whether, the Appellate Tribunal is right in law and on facts in deleting the addition on account of unpaid sales tax liability amounting to Rs. 3,130 and Rs. 895 invoking the provisions of section 43 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1997] 224 ITR 677. Following the said decision, we hold that the Tribunal was right in law in deleting the addition on account of unpaid sales tax liability amounting to Rs. 3,130 and Rs. 895 by holding that the provisions of section 43B of the Act was not applicable. In so far as unpaid royalty is concerned, it was submitted on behalf of Mr. Joshi that section 43B opens with a non obstante clause and hence any deduction which was otherwise allowable under the Act could not be allowed unless and until the amount had actually been paid by the assessee. It was further submitted that even if the assessee was following the mercantile system of accounting, it could not be permitted a deduction on the basis of accrual of liability in view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, viz., that as the words "cess" or "fee" had been added with effect from April 1, 1989, no disallowance in respect of the royalty amount could be made by resorting to the provision of section 43B of the Act. Moreover, the Tribunal has also taken note of the fact that the Deputy Commissioner of Income-tax (Appeals) has recorded that both sales tax and royalty liabilities became due in the last quarter of the financial year and were payable and actually paid in the next accounting year before the due date of the return. Both the questions, therefore, referred to us are answered in the affirmative, i.e., in favour of the assessee and against the Revenue. The reference stands disposed of accordingly with no order as to costs. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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