Section 43B applies only to the assessee's own tax or duty liability, not to electricity duty collected as agent.

Section 43B applies only to sums payable by the assessee as its own primary liability for tax, duty, cess or fee, and not to amounts merely collected under a statutory duty for remittance to the Government. Under the Punjab Electricity (Duty) Act, the consumer bears the duty liability and the licensee acts only as a collecting agency. Electricity duty collected in that capacity is therefore outside Section 43B, so the disallowance cannot be sustained and the issue is decided for the assessee.

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Issues: Whether Section 43B of the Income-tax Act, 1961 applies to electricity duty collected by a licensee under the Punjab Electricity (Duty) Act, 1958.

Analysis: Section 43B disallows a deduction only in respect of sums payable by the assessee by way of tax, duty, cess or fee under any law. The electricity duty scheme under the Punjab Electricity (Duty) Act, 1958 shows that the liability to pay duty is on the consumer and the licensee is only required to collect the amount and deposit it with the State Government. The statutory rules framed under the Act reinforce that the licensee acts as a collecting agency and does not bear the primary liability to pay the duty itself. A provision like Section 43B is attracted only where the assessee is the person primarily liable to pay the tax or duty.

Conclusion: Section 43B does not apply to electricity duty collected by the assessee in its capacity as a collecting agency, and the issue is answered against the Revenue and in favour of the assessee.

Final Conclusion: The appeals fail because the electricity duty collected under the statutory scheme is not a sum payable by the assessee as its own primary liability, so the disallowance under Section 43B cannot be sustained.

Ratio Decidendi: Section 43B applies only to amounts constituting the assessee's own primary liability to pay tax, duty, cess or fee, and not to sums merely collected under a statutory obligation for remittance to the Government.

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