TaxTMI 
TaxTMI 
2012 (1) TMI 91
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....1989-90. The question of law which we have to answer is as under:- "Whether the tribunal was justified in holding the assessee was not entitled to deduction under section 43B of the Income-tax Act, 1961 in respect of interest actually paid on additional sales-tax?" 2. Section 43B (a) of the said Act, to the extent relevant, is as under:- "43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of - (a) Any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or (b) xxxx xxxx xxxx xxxx (c) xxxx xxxx xxxx xxxx (d) xxxx xxxx xxxx xxxx &....
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....rtment to make payment of Rs. 31,82,371/-. The assessee disputed charging of this additional Sales Tax but made payment of an amount of Rs. 15 lakhs during the previous years relevant to asstt. Years 1984-85 and 1985-86. Simultaneously, the assessee challenged the demand in the H.P. High Court. However, the balance payment of Rs. 16,82,371/- was made during the year under consideration. It was also submitted that payment of interest amounting to Rs. 10,04,408/- was due to the Forest Department for the period 1.7.1987 to 31.3.1989. The case of the assessee before the AO was that deduction for both Sales Tax (Rs. 16,82,371/-) and interest (Rs. 10,04,408/- was allowable in the year under consideration. The Assessing Officer observed that, "the....
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....,408/- is concerned, it may be pointed out that in view of the expression "any sum payable" used in Clause (a) of Sec. 43B, read with its definition contained in Explanation (2), there should exist a legal liability by way of tax, duty etc. However, the assessee in this case has not brought on record any material mention to show that any sum was payable by it by way of interest on delayed payment of sales tax. On the other hand, from the assessee's letter dated 16.3.1992 filed before the AO, copy placed at pages 15 to 19 of the Paper Book, extracted below, it is evidence that it merely anticipated the liability but no demand as such was created against it:- 'This interest was due to Forest department of Himachal Pradesh Government....
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....adesh General Sales Tax Act, 1968. The said provisions, to the extent relevant, read as under:- "17-A (1) xxxx xxxx xxxx xxxx (2) If the amount of tax or penalty due from a dealer is not paid by him within the period specified in the notice of demand or, if no period is specified within thirty days from the service of such notice, the dealer shall, in addition to the amount of tax or penalty, be liable to pay simple interest on such amount at the rate of one percentum per month from the date immediately following the date on which the period specified in the notice or the period of thirty days, as the case may be, expires, for a period of one month and thereafter at the rate of one and a half percentum till the default c....
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....ssee only on the ground that the amount of interest of Rs. 10,04,408/- did not fall within the expression "any sum payable" used in Section 43B of the said Act. However, we find that Section 17-A (2) of the Himachal Pradesh General Sales Tax Act, 1968 specifically provides that if the amount of tax or penalty due from a dealer is not paid by him within the period specified in the notice of demand or, if no period is specified within thirty days from the service of such notice, the dealer shall, in addition to the amount of tax or penalty, as the case may be, be liable to pay simple interest on such amount at the rate of one percentum per month for the first thirty days and for the period subsequent thereto at the rate of one and a half perc....