TaxTMI 
TaxTMI 
1994 (3) TMI 147
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....B. The learned CIT(A) erred in disallowing under s. 43B items of MST Rs. 5,51,115 and CST of Rs. 1,60,688 which were not debited to P&L account. C. The learned CIT(A) erred in treating deferred sales-tax of MST of Rs. 5,51,115 and CST of Rs. 1,60,688 as covered under s. 43B. D. The learned CIT(A) erred in not accepting the contention of assessee that CBDT Circular No. 496 (F. No. 201/34/86-ITA dt. 25th Sept., 1987), is binding wherein it is held that deferred sales-tax credit has to be treated as sales-tax paid. 3. The learned CIT(A) erred in sustaining disallowance of Rs. 3,531 being loss on sale of spares/raw materials. 4. The appellant seeks right to ad, alter, amend grounds of appeal." 2. The facts in regard to ground No. 1A and B ....
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....es Bureau (P) Ltd. vs. CIT 1973 CTR (SC) 44 : (1973) 87 ITR 542 (SC). Shri O.P. Vaish appearing for the assessee-company submitted thatMaharashtraStatefloated a package scheme in the year 1983. Under the said scheme the sales-tax both Central and the State would get absorbed under the deferred payment scheme, which will be converted into a loan under that scheme. The amount was accordingly allowed to be paid by the assessee as repayment of the loan in specified instalments. Shri Vaish submitted that s. 38 of theMaharashtraSales-tax Act was amended by the introduction of the proviso, which is reproduced below for the sake of facility: "Provided also that, notwithstanding anything contained in this Act or in the rules made thereunder but sub....
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....he Govt. either in lump sum or in instalment. 2. Sec. 43B of the IT Act, 1961, introduced by the Finance Act, 1983 w.e.f. 1st April, 1984 provides, inter alia, that a deduction in respect of any sum payable by the assessee by way of tax or duty under any law for the time being in force shall be allowed from the income of the previous year in which such sum is actually paid irrespective of the previous year in which the liability to pay such sum was incurred. Since the introduction of this provision assessees who collect sales-tax but do not pay the amounts to the Govt. during the previous year, under the deferral scheme provided for by the State Govts. are not entitled to the benefit of deduction from their income. 3. Representations have....
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....he State Govts. was considered in Board's Circular No. 496 (F. No. 201/34/86-ITA.II), dt.25th Sept., 1987[(1988) 68 CTR (St) 109] and it was decided that where the State Govts. make an amendment in the ST Act to the effect that the sales-tax deferred under the scheme shall be treated as actually paid the statutory liability shall be treated as discharged for the purposes of s. 43B. 2. It has been brought to the notice of the Board that some State Govts. instead of amending the ST Act have issued Govt. orders notifying schemes under which sales-tax is deemed to have been actually collected and disbursed as loans. Such Govt. orders also provide that entries shall be made in the Govt. accounts giving effect to deemed collections by crediting ....
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....itted that by virtue of this agreement, the assessee having been allowed deferment, also being allowed conversion into a loan and by virtue of the s. 38 which is reproduced earlier, the amount has to be treated as duly paid by the assessee. He submitted that the Ahmedabad Bench of the Tribunal in the case of Morvi Horological Industries vs. ITO (1991) 39 TTJ (Ahd) 4 : (1991) 36 ITD 115 (Ahd) have held that on these circumstances that the said amount could not be disallowed by applying s. 43B of the Act. The Departmental Representative relied on the orders. 7. We have given our very careful consideration to the rival submissions. The Tribunal supra had considered the Board's Circular No. 496, dt.25th Sept., 1987and in para had observed as u....