1990 (9) TMI 121

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.... scheme, which was applicable to the assessee, the sales-tax collected was to be paid in certain instalments after a period of 12 years. The copies of relevant instructions of the Government have been filed by the assessee. According to the subsequent instructions which were issued by the Government in order to remove the difficulties experienced by the industrial units on account of insertion of section 43B in the Income-tax Act, 1961 under which the accrued liability to pay sales-tax was not allowable as deduction in the year in which it was incurred unless it was discharged by payment, the liability to pay sales-tax was to be treated as discharged and the relevant amount was to be treated as interest-free loan payable after period of 12 ....

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....Since the liability for payment of sales-tax stood discharged on account of specific instructions of the Government to the said effect, it followed that the bar against disallowance contained in section 43B as amended did not operate. In this connection, it is pertinent to refer to instructions of CBDT No. 496 dt. 25-9-1987 (published in 1988, 169 ITR Statute 63) the material portions of which are as follows : " Sales-tax deferral scheme - Provisions of sec. 43B of the Income-tax Act, 1961 Clarification regarding. Several State Governments have introduced sale-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 s....