COMMISSIONER OF INCOME TAX Vs. ASSOCIATED PIGMENTS LTD

JUDGEMENT

(1.) IN this reference under S. 256(1) of the IT Act,1961 ('the Act'), the following questions of law have been referred by the Tribunal for the asst. yr. 1985-86:

(2.) THE assessee is a limited company and the assessment year involved is 1985-86. The facts of the case are that during the assessment proceedings the ITO noticed that a sum of Rs.2,50,100 represented the assessee's liability towards sales-tax. According to him, the provisions of S. 43B of the Act would be applicable to this case and therefore, the difference between the said sum of Rs. 2,50,100 and Rs.1,72,661, being the amount disallowed last year but paid during the current year of account, must be added to the assessee's income. He, therefore, added the sum of Rs.77,439.

(3.) THE Tribunal considered the rival submissions. The sales tax account as maintained by the assessee was also duly considered. Since the assessee collected sales tax which was credited to a separate sales tax account and the sales tax paid was debited to the said account, S. 43B is not applicable. The addition of Rs. 77,439 made by the ITO was held to the deleted.