COMMISSIONER OF INCOME TAX Vs. KUNJUMYTHEEN KUNJU A

JUDGEMENT

(1.) THE assessment year in both these references is 1984-85. Although the amounts involved are different, the answer which the Revenue expects by these references is in identical terms and is reproduced hereinafter ;

(2.) IT would be at once seen that except for the situation that in Income-tax Reference No. 141 of 1987 the amount is Rs. 51,298 and in Income-tax Reference No. 142 of 1987 the amount is Rs. 18,086, there is no difference. The question is as to whether the amounts in question could be brought to tax in the assessment year (1984-85) under consideration, by application of the provisions of Section 43B of the Income-tax Act, 1961, as amended up to date, specially with regard to the assessment year in question. There is no doubt that the position of law as it stood at the time when the authorities considered the question was controlled by the provisions of Section 43B of the Act as it stood then. The position was that what was required for treating the amounts as income liable to taxation, not only should the liability to pay the tax or duty to be incurred in the accounting year in question, but it was further necessary that the amount should be statutorily payable in the accounting year itself.

(3.) IT would thus be clear that even if the concerned amount might not have been payable within the year in question under the relevant taxation law, it would have to be understood as "any sum payable" in the context. If this is the position that emerges as a result of the deeming provision arising out of the Finance Act, 1989, with regard to Explanation 2 to Section 43B of the Act, the obvious result would be that the provisions of Section 43B of the Act would become operative where the liability to pay the tax or the duty was incurred in the accounting year in question, for which the payment was collected and the amount was actually paid by the assessee, even in a situation that such amount might not have been payable on or before the last date of the accounting year or the accounting period.