Section 43B deduction dispute raised a referable question of law amid conflicting judicial views on sales tax payment timing.

Conflicting High Court views on section 43B of the Income-tax Act created a referable question of law where deduction of sales tax paid within the time allowed under the Himachal Pradesh Sales Tax Act was denied on the basis of actual-payment treatment. The Court noted that the issue had also generated differing Supreme Court treatment at the special leave stage, and held that the Tribunal's order raised a question of law fit for reference under section 256(2). The Tribunal was therefore directed to state the case and refer the question to the High Court.

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Issues: Whether a question of law arose from the Tribunal's order so as to warrant a reference under section 256(2) of the Income-tax Act, 1961 in relation to disallowance under section 43B.

Analysis: The dispute concerned deduction of sales tax paid within the period allowed under the Himachal Pradesh Sales Tax Act, while the Tribunal had followed the view that section 43B permits deduction only on actual payment. The Court noticed conflicting High Court decisions on the scope of section 43B and the fact that the Supreme Court had granted special leave in one line of cases and dismissed the Revenue's special leave petition in the other. In that background, the Court held that the controversy raised a referable question of law.

Conclusion: A question of law did arise, and the Tribunal was directed to state the case and refer the question to the High Court.

Ratio Decidendi: Where a statutory deduction issue turns on conflicting judicial views and the question affects the application of section 43B, a referable question of law arises for purposes of section 256(2).

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