Section 43B disallowance fails where sales tax liability was not claimed as deduction and was paid later.

No referable question of law arose from the Tribunal's deletion of the addition under section 43B for sales tax liabilities reflected in the balance sheet. The amount represented sales tax realisation for the last month of the previous year, became payable in the next month under the sales tax law, and was paid in November 1983. As the assessee had not claimed the amount as a deduction or debited it to the profit and loss account, no disallowance was warranted merely because it appeared on the liabilities side of the balance sheet. The section 256(2) reference application was therefore not maintainable.

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Issues: Whether any referable question of law arose from the Tribunal's finding deleting the addition made under section 43B in respect of sales tax liabilities shown in the balance sheet.

Analysis: The disputed amount represented sales tax realisation of the last month of the previous year relevant to the assessment year. It became payable in the next month under the sales tax law and was in fact paid in November 1983. The assessee had not claimed the amount as a deduction and had not debited it to the profit and loss account. On these facts, the Tribunal found that no disallowance was called for merely because the amount appeared on the liabilities side of the balance sheet, and that no question of making an add back from the profit and loss account arose.

Conclusion: No question of law arose for reference, and the application under section 256(2) was not maintainable.

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