2006 (1) TMI 98

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssee formed part of the assessee's trading receipts in view of the ratio of the Supreme Court's decisions in the cases of Chowringhee Sales Bureau P. Ltd. v. CIT [1973] 87 ITR 542, Jonnalla Narashimharao and Co. v. CIT [1993] 200 ITR 588 and Sinclair Murray and Co. P. Ltd. v. CIT [1974] 97 ITR 615?" The relevant assessment year is 1987-88 and the corresponding accounting year ended on September 9, 1986. The respondent/assessee was carrying on printing work. The only point of dispute pertains to the inclusion of Rs. 19,685 representing the amounts collected towards sales tax held by the assessee as contingent deposit. The Assessing Officer made addition under section 43B of the Income-tax Act. Aggrieved by the order of the Assessing Offic....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tive of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him." A reading of section 43B of the Act makes it clear that if tax having become payable is not paid by the assessee then alone section 43B of the Act comes into operation. Section 43B of the Act was inserted with effect from April 1, 1984, to discourage taxpayers who did not discharge their statutory liability of payment of sales tax, excise duty, employer's contribution to provident fund, etc., for long periods of time, but claimed deductions in that regard from th....