COMMISSIONER OF INCOME TAX Vs. MIS CHEMICALS LTD

JUDGEMENT

(1.) THE Tribunal has referred the following two questions of law for opinion of this Court under S. 256 (1) of the IT Act, 1961, ('the Act') :

(2.) THE question No. 1 is squarely covered by the ratio of the decision in Allied Motors (P) Ltd. vs. CIT (1977) 139 CTR (SC) 364 : (1997) 224 ITR 677/91 Taxman 205 (SC) in which, while considering the provisions of S. 43B of he Act, which was inserted w.e.f. 1st April, 1984, it was held that the proviso added to S. 43B by the Finance Act, 1987 made it clear that the section will not apply in relation to any sum which is actually paid by the assessee in the next accounting year if it is 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. However, the expression 'any sum payable' in cl. (a) of s. 43B was open to the interpretation that the amount payable in a particular year should also be statutorily payable under the relevant statute in the same year and, therefore, Expln. 2 was added by the Finance Act, 1989 with retrospective effect from 1st April, 1984 for the purpose of removing any ambiguity that may arise due to the said expression. The Supreme Court held that S. 43B(a), the first proviso to S. 43B and Expln. 2 were required to be read to gather as giving effect to the true intention of S. 43B and the first proviso to S. 43B was to be treated as having retrospective effect. In view of the ratio of the said decision of the Supreme Court, we hold that the Tribunal was justified in deleting the amount of Rs. 5,17,472 being sales-tax liabilities under S. 43B.

(3.) BOTH the above questions are, therefore, answered in the affirmative against the Revenue and in favour of the assessee. The reference stands disposed of accordingly, with no order as to costs.