TaxTMI 
TaxTMI 
2007 (6) TMI 234
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....e view of learned CIT(A) that as sales-tax collections for April, 1982 were not credited to trading account, hence sales-tax expenditure of Rs. 7,11,093 could not be allowed under s. 43B of the Act, is erroneous, contrary to law, based on unsound reasoning and irrelevant considerations, and is not tenable in law. 3. The view of learned CIT(A) that deduction for sales-tax payment of Rs. 7,11,093 was not allowable under s. 43B of the Act on payment basis in the year under consideration, is wholly erroneous, arbitrary and in violation of the said section and the appellant is entitled to deduction of the said amount from its income chargeable to tax. 4. The impugned order is contrary to facts, law and principles of natural justice. 5. ....
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....ror in not allowing the same. In this connection, reliance was placed on the decision of Tribunal Allahabad Bench-A in the case of New Cownpore Flour Mills (P) Ltd. vs. ITO (1986) 25 TTJ (All) 89 : (1986) 19 ITD 360 (All) at p. 368. As against this, the learned Departmental Representative relied on the order of the learned CIT(A). 3. By the impugned order, CIT(A) declined the claim of deduction by observing that the assessee wants to take double benefit of claim of payment of sales-tax at Rs. 7,11,093. He further observed that the assessee was having amount of Rs. 7,27,822 as sales-tax collected from the constituents pertaining to the period relevant for preceding asst. yr. 1983-84 and therefore any payment on account of sales-tax to be ....
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.... gone through the orders of the authorities below and also material placed on record. The original assessment was completed on 5th Sept., 1986. During the course of original assessment proceedings the assessee filed a revised return claiming a deduction of Rs. 7,11,093 on account of sales-tax collected in the month of April, 1982 (relating to asst. yr. 1983-84 previous year ending on 30th April, 1982) which was paid in May, 1982 falling in the previous year commencing on 1st May, 1982 and ending on 30th April, 1983 (wrongly shown as 31st March, 1984 in the assessment order dt. 21st Feb., 2002 under appeal) corresponding to asst. yr. 1984-85 under appeal. The above claim was disallowed by the AO. The assessee went to appeal before the CIT(A)....
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....en if the mercantile method of accounting is employed and the liability to pay might have accrued which would give the assessee a right to obtain deduction, but in view of specific language of section, the assessee would not be entitled to get deduction merely on accrual of the liability to pay the tax or duty, but would be so entitled to get deduction only on actual payment of tax or duty. The legislature has also taken care by providing Explanation that the assessee shall not be entitled to any deduction under s. 43B in respect of such sum in computing the income of the previous year in which such sum is clearly paid by him in case a deduction in respect of any such sum was allowed in the previous year. It is, therefore, clear that the as....