1991 (1) TMI 109 - HC - Income Tax

Court directs re-examination of unpaid tax treatment under Income-tax Act

The High Court of Kerala directed the Tribunal to re-examine the treatment of unpaid tax collected in the last month of the previous year under section ... Business Expenditure Issues Involved: The issue involves the interpretation of section 43B of the Income-tax Act regarding the treatment of unpaid tax collected in the last month of the previous year which was not claimed as a deduction while computing income.Judgment Details:The High Court of Kerala addressed the question of whether the addition of Rs. 41,086, representing sales tax collection in the last month of the year, is a permissible addition under section 43B of the Income-tax Act for the assessment year 1984-85. The Tribunal had ruled in favor of the assessee based on a previous decision. However, the High Court, in a common judgment dated September 17, 1990, emphasized the importance of considering the amendments to section 43B introduced by various Acts. As the proper legal position was not considered by the Tribunal, the High Court declined to answer the question directly but directed the Tribunal to re-examine the matter in accordance with the law. The Court also directed the Tribunal to restore the appeal for further consideration based on the court's observations in a previous case involving the same assessee.In conclusion, the High Court answered the income-tax reference by providing directions for the Tribunal to reconsider the matter in light of the legal provisions and previous judgments. The judgment will be forwarded to the Income-tax Appellate Tribunal, Cochin Bench for further action.