TaxTMI 
TaxTMI 
2004 (10) TMI 35
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....case, the Tribunal was right in law in allowing deduction of sales tax liability under section 43B of the Income-tax Act, 1961, though the assessee had collected but not paid the amount of sales tax within the accounting period relevant to the assessment year under reference on the ground that the assessee was authorised to retain the amount for a prescribed period under the 'Deferred payment scheme' of the Excise and Taxation Department of the State Government of Haryana?" Briefly stated, the facts are that the assessee is a private limited company deriving its income from manufacturing, moulding and fabricating bricks and sale thereof. The return for the assessment year 1987-88 was filed on June 29,1987, on behalf of the company declari....
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....d Taxation Department, Government of Haryana. The Central Board of Direct Taxes has issued a Circular No. 496, dated September 25, 1987 (published in [1988] 169 ITR (St.) 53). The same reads as under: "Circular No. 496, dated September 25, 1987 Subject: Sales tax deferral scheme-Provisions of section 43B of the Income-tax Act, 1961-Clarification regarding. Several State Governments have introduced sales tax deferral schemes as a part of the incentives offered to entrepreneurs setting up industries in backward areas. Under these schemes, eligible units are permitted to collect sales tax and retain such tax for a prescribed period. After this period, the sales tax is to be paid to the Government either in lump sum or in instalments. 2....
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....ded that where amendments are made in the sales tax laws on these lines, the statutory liability shall be treated to have been discharged for the purposes of section 43B of the Act. 6. The Commissioners of Income-tax may bring the contents of this circular to the notice of all the officers working under them. [F. No. 201/34/86-ITA. II]" The Tribunal while dealing with this matter in para. 10 of its order has observed as under: "10. We may look to the rules framed by the State Government under the Haryana General Sales Tax Act, 1973. The deferment scheme was introduced by way of inserting new rules 17A to 17-O in the Haryana General Sales Tax Rules, 1975. As per rule 17-O, industrial units with fixed capital of Rs. 50 lakhs were required....
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....ise and Taxation is required to issue an entitlement certificate for one year. The industrial unit is restrained from disposing of fixed assets except with the prior concurrence of the taxation department under rule 17 of the Rules. The entitlement certificate can be cancelled in certain circumstances as provided in rule 17H. The deferment is admissible only after the issue of eligibility certificate and the voucher by the Industries Department and after the grant of entitlement certificate by the Deputy Commissioner, Excise and Taxation, vide rule 17H of the Rules. The eligible industrial unit is also required to furnish certain particulars from time to time to the Excise and Taxation Department under rule 17K. Payment of tax is to be made....