High Court Of Jharkhand
CIT vs. Bihar Foundry And Castings Ltd.
Section : 43B
Bhagwati Prasad, C.J. & D.K. Sinha, J.
Tax Appeal Nos. 37, 38 And 41 Of 2001
December 23, 2010
JUDGMENT
1. Heard the learned counsel for the parties.
2. The issue involved in these appeals is whether the circular issued by the State of Bihar in relation to the scheme for deferred payment of the sales tax would be valid for the purposes of giving concession to the assessee under section 43B of the Income-tax Act, 1961. The Tribunal has concluded in favour of the assessees observing that the circular issued by the State Government will be sufficient to cover the case for deduction under section 43B of the Income-tax Act.
3. Learned counsel for the assessee drew the attention of the court to Circular No. 674, dated December 29, 1993 ([1994] 205 ITR (St.) 119) issued by the Central Board of Direct Taxes. This circular clearly enunciates that any deferment scheme, if it is in conformity with the State law, then the same would be covered by the aforesaid circular and such accommodation would be available to the assessee.
4. The Tribunal has upheld the order of the Commissioner of Income-tax which found that the implication of section 43B of the Income-tax Act having been imported in the case of the assessee, no illegality has been committed.
5. In our considered view, the language used in the circular, referred to hereinabove clearly, makes out a case where such concession was available to the assessees and as such, deferred payment of sales tax would be deemed to be a loan which was paid subsequently and in that view of the matter, the deduction was held permissible. The arguments of the learned counsel that there is no such law and no amendment in the Sales Tax Act of the State of Bihar has been made, is not acceptable because the Central Board of Direct Taxes itself, in the circular aforesaid, has accepted that by circular such concession can be allowed. In that view of the matter, we do not find any force in these appeals. These appeals are, therefore, held meritless and are dismissed.
[Citation : 336 ITR 387]