COMMISSIONER OF INCOME TAX vs BOMBAY MOTORS.

B. R. ARORA, J. :

The Tribunal, Jaipur Bench, Jaipur for the asst. yr. 1986-87 referred the following question of law under s. 256(1) of the Act for the opinion of the High Court :

"Whether on the facts and in the circumstances of the case, the Tribunal was justified in directing that the amount of Rs. 1,16,882 being the unpaid sales-tax liability as on 30th June, 1986, i.e., the last day of previous year should not be disallowed under s. 43B of the IT Act, 1961, as the same amount was paid within the time allowed under the relevant Sales-tax Law ?

Whether the amended provisions of s. 43B introduced w.e.f. 1st April, 1988 are retrospective and are applicable to assessment year under consideration, i.e., the asst. yr. 1987-88 ?"

The material facts on the basis of which the above questions of law are to be decided are similar to those in DB IT Ref. No. 9/92, Commissioner of Income Tax Vs. Achaldas Dhanraj and Sanklecha Brothers, . The questions referred for the opinion of the High Court is identical with the question which were referred in DB IT Ref. No. 9/92. While answering the reference in DB IT Ref. No. 9/92 CIT vs. Achaldass Dhanraj (supra) this Court held that :

"The Tribunal was justified in directing that the amount of unpaid sales-tax liabilities to the last date of previous year could not be disallowed if it is found to have been paid subsequently, within the time allowed under the relevant Sales-tax Act. The proviso to s. 43B for that purpose is to be interpreted as clarificatory and applicable to the assessment years from 1984-85 to 1987-88."

For the reasons given in DB IT Ref. No. 9/92 CIT vs. Achaldass Dhanraj (supra) decided on 27th March, 1995, the questions referred are also answered in favour of the assessee and against the Revenue.

Consequently, the question No. 1 is answered in favour of the assessee and against the Revenue and it is held that the Tribunal was justified in directing that the amount of Rs. 1,16,882 being unpaid sales-tax liability as on 30th June, 1986, i.e., the last day of previous year should not be disallowed under s. 43B of the IT Act, 1961, as the same amount was paid within the time allowed under the relevant Sales-tax Law.

The question No. 2 is also answered in favour of the assessee and against the Revenue and it is held that the amended provisions of s. 43B introduced w.e.f. 1st April, 1988, are retrospective and are applicable to assessment year under consideration, i.e., the asst. yr. 1987-88.