Section 43B and revisionary power under section 263: sales tax paid within the statutory period remained deductible.

Section 263 revision was justified only to the extent the assessment omitted examination of sales tax excess collection that had not been paid to the Government, because that amount was not deductible. For the balance sales tax liability, section 43B did not bar deduction where the liability under the West Bengal Sales Tax Act, 1941 became payable only after the accounting year and was discharged within the statutory time allowed for payment and return filing. The provision was treated as aimed at unpaid statutory dues claimed on a mercantile basis, not liabilities already satisfied within the prescribed legal period.

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Issues: Whether the Commissioner was justified in invoking revisionary jurisdiction under section 263 in relation to sales tax liability claimed as deduction, and whether section 43B barred deduction for the amount paid within the time prescribed by the West Bengal Sales Tax Act, 1941.

Analysis: The assessment had been revised because the Income-tax Officer had not examined the applicability of section 43B. On the facts, part of the sales tax liability represented excess collection not paid to the Government, and that amount could not be allowed as a deduction. The balance liability was payable under the West Bengal Sales Tax Act, 1941 only after the close of the accounting year, with payment and filing of return required within the statutory period thereafter. Section 43B was held to target cases where statutory dues remained unpaid despite being claimed on mercantile basis, and not cases where the liability had been discharged within the period allowed by the taxing law.

Conclusion: The revision was sustained only to the extent of the unpaid excess collection, but section 43B did not justify disallowance of the balance amount paid within the prescribed statutory period; the Commissioner's order was therefore unsustainable in respect of that balance.

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