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TMI Blog1991 (8) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... D 177 (Coch) 2. ITO vs. Thackersi Baboobhai Co. (1986) 26 TTJ (Ahd) 517 : (1986) 18 ITD 593 (Ahd) 3. Ashutosh Roy Sons vs. ITO (1987) 29 TTJ (Cal) 44 3. It was contended before the CIT(A) that s. 43B has no application in these cases as s. 43B is not mentioned in s. 28 and s. 29 of the IT Act relating to the computation of profits and gains of business. It was further contended before the CIT(A) that provision of s. 43B has no application to these cases since the sales-tax collection and payments have been separately accounted for and no deduction has been claimed on account of sales-tax. It is further contended that the disallowance made on account of sales-tax, which was not due and not paid during the accounting year is not justified. 4. The CIT(A) considered the above submissions and held that s. 28 and s. 29 provide for the method of computation of profits and gains of business or profession and s. 29 as it stood at the material time stated that "the income referred to in s. 28 should be computed in accordance with the provisions contained in ss. 30 to 43A". But s. 28 and s. 29 are general provisions for computation of income which by their very nature are subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rictly speaking s. 43B does not make any distinction between due or otherwise. Once it is held that the sales-tax collected is the trading receipt, then the portion which has not been paid is to be treated as a revenue receipt and should be taxed, as s. 43B prohibits any other deduction except those which have been actually paid. It is also stated that the Board's circular referred to by the CIT(A) is also not applicable as the same cannot be made retrospective. 6. Learned authorised representative of the assessee, on the other hand, contended that the deletion by the CIT(A) is justified as the addition cannot be made under s. 43B on account of sales-tax which has not fallen due. In this connection the authorised representative of the assessee relied on the order of the CIT(A) and relied on in the case of Chandulal Venichand vs. ITO (1991) 96 CTR (Trib) (Ahd) 39 : (1991) 40 TTJ (Ahd) 358 : (1991) 38 ITD 138 (Ahd); vs. K.S. Lokhandwala (1989) 80 CTR (Trib)(Ahd) 90 : (1989) 31 ITD 305 (Ahd); Jamshedpur Motor Accessories Stores vs. Union of India Ors. (1991) 91 CTR (Pat) 19 : (1991) 189 ITR 70 (Pat) and stated that provision of s. 43B has no application in these cases. The sum in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while deciding the issue which came up before them under s. 40A(7) of the it Act. In this connection it may be noted that the head notes and languages of ss. 43B and 40A(7) are identical. Their Lordships of the Supreme Court have observed that the marginal note under the heading 'certain deductions to be only on actual payment'. If the marginal note or heading is any indication, and it certainly is a relevant factor to be taken into consideration in construing the ambit of a section, then the payments have not been made are to be taxed. Therefore, the heading of the section is a clear indication that amounts are to be taxed as the payments have not been made in the instant cases because they are trading receipts though they have not been debited to the Profit Loss Account and are not affecting the results of the computation of income. This is further abundantly made clear by the non obstante expression used in s. 43B r/w marginal note of the section. Their Lordships also held in the above cited case that section starts with the non obstante clause "not withstanding anything contained in any other provisions of this Act, etc.....". The effect of these words is that even if an par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any sum payable by the assessee as an employer by way of contribution to any provident fund, or superannuation fund or any other fund for the welfare of employees shall be allowed only in computing the income of that previous year in which sum is actually paid by him." 9. From the foregoing it is abundantly clear and looked from any angle the deduction can be allowed only if the sum in question is actually paid. The foregoing extract clearly shows that tax or duty can be allowed as a deduction only on the basis of actual payment. In the instant cases it is not disputed that sales-tax collected is not a trading receipt, and also it is not disputed that the addition has been made on account of sales-tax which have not been paid. In view of the facts stated above, there is no other view possible that to hold that the unpaid portion of the sales-tax is a revenue receipt and is taxable. 10. In this context we feel it necessary and appropriate to refer to the Hon'ble Supreme Court decision in the case of CIT vs. Distributors (Baroda) Pvt. Ltd. (1972) 83 ITR 377 (SC). Their Lordships at page 383 have held that "we cannot say that the legislature did not know its own mind when it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held that sales-tax though collected and not paid, on the ground that they are not due, cannot be taxed. The intention of the legislature is very clear from the words used in the section. They have used the word 'paid' and 'not payable' and 'not due'. As observed earlier, it may be again stated 'in a Taxing Act one has to look merely at what is clearly said. There is no room for any intendment, there is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing to be employed, one can only took fairly at the language used". 13. So, in the circumstances stated above, we hold that the CIT(A) is not justified in deleting the addition made by the ITO in both the cases on account of sales-tax on the ground that the same was not due, having held that the sales-tax receipts are trading receipts. 14. Before parting with the subject, we also hold that the proviso to s. 43B which was inserted w.e.f. 1st April, 1988, cannot be applicable to the years under appeal as the amendment has not been made retrospective. In this connection it is worthwhile to refer to the case of ITO vs. M.C. Ponnoose Ors. (1970) 75 ITR 174 (SC) at page 177. Their Lordships ..... X X X X Extracts X X X X X X X X Extracts X X X X
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