Section 43B inapplicable to betting tax collected as agent and held for remittance, not as the assessee's own liability.

Section 43B of the Income-tax Act did not apply to betting tax collected by the assessee from licensed bookmakers under the Bengal Amusements Tax Act, because the statutory liability to pay that tax rested on the bookmakers, not on the assessee. The assessee acted only as a collecting agent required to remit the amount to the Government Treasury, so the collected sum was not its own tax liability but money held for remittance. Depositing the amount in the assessee's bank account or mixing it with other funds did not change its legal character. The addition for non-remittance was therefore deleted.

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Issues: Whether section 43B of the Income-tax Act, 1961 applied to the betting tax collected by the assessee from licensed bookmakers and not remitted to the Government Treasury.

Analysis: The betting tax was statutorily payable by the licensed bookmakers under the Bengal Amusements Tax Act, 1922, while the assessee's own tax liability related only to totalisator tax. The assessee was authorised merely to collect the betting tax on behalf of the Government and remit it to the Treasury. Once collected, the amount did not represent tax payable by the assessee in its own right but was in the nature of money held for remittance. In that situation, the non-remittance could not be brought to tax by invoking section 43B. The fact that the amount was deposited in the assessee's bank account and mixed with its funds did not alter the legal character of the receipt for this purpose.

Conclusion: Section 43B did not apply, and the addition made on account of the unremitted betting tax was deleted in favour of the assessee.

Ratio Decidendi: Section 43B cannot be invoked to disallow an amount that is not the assessee's own statutory tax liability but is merely tax collected as an agent for remittance to the Government.

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