COMMISSIONER OF INCOME TAX Vs. ELECTRO CONTROLS

JUDGEMENT

(1.) IN this reference at the instance of the Revenue, the following question has been, referred for our opinion in respect of the assessment year 1984 -85 :

(2.) WE have heard Ms. Mona Bhatt, learned counsel for the Revenue, and Mr. R.K. Patel, learned counsel for the responsent -assessee.

(3.) AT the hearing today, our attention is invited to the decision of the Supreme Court in Allied Motors (P.) Ltd. v. CIT : [1997]224ITR677(SC) . The apex court has held that as per the first proviso added to Section 43B by the Finance Act, 1987, the main part of Section 43B will not apply in relation to any sum which was actually paid by the assessee in the next accounting year if it was paid on or before the due date for furnishing the return of income in respect of the previous year, in which the liability to pay such sum was incurred and the evidence of such payment is furnished by the assessee along with the return. Explanation 2 was, therefore, added by the Finance Act, 1989, with retrospective effect from April 1, 1984, for the purpose of removing any ambiguity about the term 'any sum payable' under Clause (a) of Section 43B.