Commissioner of Income Tax, Meerut vs Mohan Shramic Udyog Ltd.

The Income Tax Appellate Tribunal, Delhi, has referred following question of law u/s 256(l) of the Income Tax Act, 1961 (hereinafter referred to as ''the Act'') for opinion to this Court:

"1. Whether, on the facts and in the circumstances of the case, the ITAT was legally correct to confirm the order of the Commissioner (Appeals) deleting the addition made by the assessing officer u/s 43B

The reference relates to the assessment year 1984-85.

Briefly stated the facts giving rise to the present reference is as under:

During the assessment year in question it was noticed by the assessing authority in the course of assessment that on account of Central Sales Tax and local sales tax amount of Rs. 54,599 was shown as payable on the closed accounting period ending on 30-6-1983. He applied the principle laid down by the Supreme Court in the case of Chowringhee Sales Bureau (P) Ltd. Vs. Commissioner of Income Tax , West Bengal, and other decisions on the point and held that the sales tax of Rs. 54,599 was the assessee''s trading receipt, as it has not been actually paid during the assessment year in question it was disallowed u/s 43B of the Act.

Feeling aggrieved, the respondent preferred an appeal before the Commissioner of Income Tax, who found that the payments of local sales tax and Central sales tax had been made in the first month of the next accounting year, i.e., within the statutory period as per the sales tax law. He accordingly deleted the disallowance/ addition of Rs. 54,599 which order has been upheld by the Tribunal.

We have heard Sri A.N. Mahajan, learned standing counsel appearing for revenue. Nobody appears on behalf of respondent.

We find that Supreme Court in the case of Allied Motors (P.) Ltd. Vs. Commissioner of Income Tax, Delhi, has held that where amount of tax collected during the last month of the accounting year is paid to the State Government within the stipulated period in the first month of the next assessment year the same is allowable. We accordingly answer the question of law referred to us in affirmative, i.e., in favour of the assessee and against the revenue. However, there shall be no order as to costs.