Judgment:
1. In both the references the Patna Bench of the Tribunal at the instance of the Revenue (sic-assessee) after drawing a common statement of the case had referred the following questions for our opinion:
1. Whether on the facts and in the circumstances of the case the Tribunal was correct in confirming the addition under Section 43B amounting to Rs. 19,913 made by the AO ?
2. Whether on the facts and in the circumstances of the case the Tribunal has correctly applied the provisions of Section 43B and its Expln. 2 inserted by the Finance Act, 1989, with retrospective effect from 1st April, 1984?
2. Short facts giving rise to these references are that the two assessees realised a sum of Rs. 19,913 and Rs. 31,631 respectively in May and June i.e., in the last quarter of the accounting year. It did not pay the amount of sales-tax so realised in that accounting year. Both the assessees claim deduction of the amount of sales-tax collected during the last quarter of the accounting year. As the taxes were not paid during the accounting period, the AO disallowed the claim considering it to be trading receipt and relying on the provisions of Section 43B of the IT Act (hereinafter referred to as 'the Act') added the same in their total income. However, on appeal it was deleted on the ground that the sales-tax collected for the month of May and June were not statutorily payable during the accounting year ending on 19th June, 1985, under the provisions of the Bihar Sales-tax Act but paid after close of the accounting year within statutory period. However, on further appeal by the Revenue, the Tribunal, Patna Bench, came to the conclusion that any payment beyond accounting period cannot exonerate the assessees from the purview of application of Section 43B of the Act and accordingly it allowed the appeal of the Revenue.
3. On these facts the aforesaid questions have been sent for our opinion.
4. Mr. Ashish Agrawal, appearing on behalf of the assessee submits that the questions stand answered by this Court in the case of Jamshedpur Motor Accessories Stores v. Union of India and Ors. : [1991]189ITR70(Patna) . He has drawn our attention to the following passage from the said judgment:
It is, therefore, held that the petitioner was entitled to claim deduction of such sum on account of Bihar sales-tax, Addl. sales-tax and Central sales-tax, if actually paid by it on or before the due date applicable to it for furnishing its return of income under Sub-section (1) of Section 139. With regard to the amount on account of provident fund and family pension scheme, if it was paid on or before the due date as defined in the Explanation below Clause (va) of Sub-section (1) of Section 36, the petitioner shall be entitled to claim deduction of the same.
5. He points out that the judgment of this Court in the case of Jamshedpur Motor Accessories Stores (supra) has been affirmed by the Supreme Court in (1991) 191 ITR 8. He also points out that the judgment of the Patna High Court has been quoted with approval by the Supreme Court in the case of Allied Motors (P.) Ltd. v. CIT : [1997]224ITR677(SC) . In the said case it has been observed as follows:
The Patna High Court has also held the amendment inserting the first proviso to be explanatory in the case of Jamshedpur Motor Accessories Stores v. Union of India and Ors. : [1991]189ITR70(Patna) . It has held the amendment inserting first proviso to be retrospective. The Special Leave Petition from this decision of the Patna High Court was dismissed [see (1991) 191 ITR 8]. The view of the Delhi High Court, therefore, that the first proviso to Section 43B will be available only prospectively does not appear to be correct. As observed by G.P. Singh in his Principles of Statutory Interpretation, 4th Edn., p. 291, 'It is well settled that if a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended.' In fact the amendment would not serve its object in such a situation, unless it is construed as retrospective.
6. Mr. Sharan, appearing on behalf of the Revenue, very fairly states that the questions sent for our opinion have squarely been answered by the Patna High Court in the case of Jamshedpur Motor Accessories Stores (supra) and by the Supreme Court in the case of Allied Motors (P) Ltd. (supra).
7. In that view of the matter, we are of the opinion that Tribunal was not correct in confirming the addition of sales-tax collected in the last quarter of the accounting year when it was paid before the due date applicable for furnishing the return.
8. Accordingly, the answer to the first question is in negative against the Revenue and in favour of the assessees.
9. We are further of the opinion that the Tribunal has not correctly applied the provisions of Section 43B of the Act and its Expln. 2 inserted by the Finance Act, 1989, hence answer to the second question is also in negative, against the Revenue and in favour of the assessees.