Section 43B actual payment rule excludes bank guarantees and bottling fee outside tax-like exactions.

Section 43B requires actual payment of a statutory liability before deduction is allowed, and furnishing a bank guarantee does not amount to such payment because no money is paid to the exchequer. The provision also applies only to compulsory tax-like exactions within the genus of "tax, duty, cess or fee, by whatever name called", applying ejusdem generis to confine its scope. On that basis, bottling fee payable under the Rajasthan Excise regime, being consideration for the exclusive privilege to bottle IMFL and not a tax or fee of that character, falls outside section 43B. The disallowance was therefore not attracted.

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Issues: Whether furnishing of a bank guarantee can be treated as actual payment for the purposes of section 43B of the Income-tax Act, 1961, and whether bottling fee payable under the Rajasthan Excise regime falls within tax, duty, cess or fee so as to attract that provision.

Analysis: Section 43B requires actual payment, not deemed payment. Furnishing of a bank guarantee does not involve money flowing from the assessee to the public exchequer and therefore cannot be equated with actual payment. The expression "tax, duty, cess or fee, by whatever name called" is confined by the principle of ejusdem generis to compulsory exactions in the nature of taxation. Bottling fee for obtaining the exclusive privilege to bottle IMFL is a consideration under the regulatory/excise arrangement and not a tax or fee within section 43B.

Conclusion: The section 43B disallowance was not attracted on the basis of the bank guarantee, and bottling fee of this nature was outside the scope of section 43B.

Ratio Decidendi: For section 43B, only a statutory levy that is actually paid in cash or equivalent and that falls within the genus of compulsory tax-like exactions is covered; a bank guarantee and a contractual/exclusive-privilege consideration do not satisfy that requirement.

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