https://www.taxtmi.com/caselaws?id=22941 Under the mercantile system, sales tax liability is deductible when it accrues, not only when it is actually paid. The sum collected as sales tax forms part of trading receipts, but once the statutory liability has arisen, it is allowable in the year of accrual. Section 43B of the Income-tax Act, 1961, which requires actual payment for deduction of certain tax liabilities, was treated as prospective and not applicable to the assessment year in question. On that basis, the addition by the Income-tax Officer was found unsustainable, and the accrued sales tax deduction was allowed despite non-payment in the year. en-us Tue, 20 Nov 1990 00:00:00 +0530 Tue, 15 Dec 2009 14:15:20 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=22941 Under the mercantile system, sales tax liability is deductible when it accrues, not only when it is actually paid. The sum collected as sales tax forms part of trading receipts, but once the statutory liability has arisen, it is allowable in the year of accrual. Section 43B of the Income-tax Act, 1961, which requires actual payment for deduction of certain tax liabilities, was treated as prospective and not applicable to the assessment year in question. On that basis, the addition by the Income-tax Officer was found unsustainable, and the accrued sales tax deduction was allowed despite non-payment in the year. Case-Laws Income Tax Tue, 20 Nov 1990 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=22941