2002 (1) TMI 30

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....e Tribunal has referred the following questions for the opinion of this court: "Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the addition made under section 43B notwithstanding the fact that the assessee did not make the payment of out standing sales tax liability during the previous year relevant to the assessment year 1987-88?" ....

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.... that if the amount of sales tax has been paid after submission of returns but within the grace period allowed under the relevant provisions of the sales tax, the deduction under section 43B cannot be denied. In Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677 (SC), their Lordships have considered the Explanation to the provision of section 43B, which provides that if the amount has been paid ....

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.... to prevent any undue hardship to assessees such as the ones before us. The memorandum of reasons takes note of the combined effect of section 43B and the first proviso inserted by the Finance Act, 1987. After referring to the fact that the first proviso now removes the hardship caused to such taxpayers, it explains the insertion of Explanation 2 as being for the purpose of removing any ambiguity ....