Statutory payment made before return due date and compulsory cooperative contribution were both held deductible.

Section 43B disallowance was held unsustainable where the record, including the audit report and supporting details, showed the relevant payments were made before the due date for filing the return and no factual perversity was shown; the assessee's claim was upheld. A compulsory contribution to the Cooperative Education Fund was also treated as allowable because it was statutorily mandated under the applicable cooperative law and therefore had the character of a compulsory expenditure rather than a voluntary application of income; the deduction was allowed. Both Revenue challenges failed and the assessee's entitlement to the disputed deductions was affirmed.

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Issues: (i) Whether the disallowance under Section 43B of the Income-tax Act, 1961 was sustainable when the payments were shown as made before the due date for furnishing the return of income and the factual verification by the tax auditors and authorities was accepted. (ii) Whether the compulsory contribution to the Cooperative Education Fund under the governing cooperative law was allowable as a deduction.

Issue (i): Whether the disallowance under Section 43B of the Income-tax Act, 1961 was sustainable when the payments were shown as made before the due date for furnishing the return of income and the factual verification by the tax auditors and authorities was accepted.

Analysis: The payments covered by Section 43B were examined by the appellate authorities on the basis of the audit report and the details furnished by the assessee. The finding recorded was that the relevant amounts had been paid before the due date prescribed for filing the return, and no factual error or perversity in that finding was demonstrated. The addition was therefore deleted on a correct appreciation of the record.

Conclusion: The disallowance under Section 43B was not justified and the finding in favour of the assessee was upheld.

Issue (ii): Whether the compulsory contribution to the Cooperative Education Fund under the governing cooperative law was allowable as a deduction.

Analysis: The contribution was statutorily mandated for the assessee as a cooperative society under the applicable cooperative law and rules. Since the amount was a compulsory payment imposed by statute, it had the character of an expenditure rather than a voluntary application of income. The Tribunal's view that the payment was allowable was accepted.

Conclusion: The contribution to the Cooperative Education Fund was allowable as a deduction and the Revenue's challenge failed.

Final Conclusion: Both grounds raised by the Revenue were rejected, and the assessee's entitlement to the disputed deductions stood affirmed.

Ratio Decidendi: A statutory payment made before the due date of return and supported by verified records cannot be disallowed under Section 43B, and a compulsory contribution imposed by statute on a cooperative society is allowable as a deduction.

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