COMMISSIONER OF INCOME TAX Vs. DINESHKUMAR GORDHANLAL

JUDGEMENT

(1.) AT the instance of the Department, the Tribunal has stated the case on application registered as R. A. No. 385/Ind. of 1991 arising out of I.T.A. No. 412/Ind. of 1989 and C. O. No. 70/Ind. of 1989 and referred the undernoted question of law for our consideration and opinion :

(2.) BRIEFLY stated, the facts of the case are that the year of assessment is 1984-85. The accounting period ended on November 4, 1983. Section 43B was inserted in the Act by the Finance Act, 1983, with effect from April, 1, 1984. It was thus operative for the assessment year 1984-85. There was an outstanding balance of Rs. 5,978 in the mandi tax account. According to the Income-tax Officer, as this amount had remained unpaid, the provisions of. Section 43B were attracted. He, therefore, made an addition of Rs. 5,978. On appeal, the Commissioner of Income-tax (Appeals) held that the provisions of Section 43B of the Income-tax Act, 1961, as it then stood, were inapplicable to mandi tax. He, therefore, deleted the addition of Rs. 5,978. The Department then filed the appeal before the Tribunal. The Tribunal held that it was neither a mandi tax nor a duty, but a fee and the word "fee" was inserted in Section 43B(a) with effect from April 1, 1989. The Tribunal placed reliance on Srihakollu Subba Rao and Co. v. Union of India [1988] 173 ITR 708 (AP) and dismissed the appeal of the Department and allowed the cross-objection of the assessee pro tanto. The Department felt aggrieved and filed an application under Section 256(1) of the Income-tax Act, 1961. On this application, the Tribunal stated the case and referred the aforesaid question of law for our consideration and opinion.

(3.) THE Tribunal considered the matter and took the decision as under :