Karnataka H.C : Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that ‘kist’ is neither duty nor tax and, therefore, will not come under the provisions of s. 43B of the Act ?

High Court Of Karnataka

CIT vs. Vijaya Enterprises

Section 43B

Asst. Year 1986-87

V.K. Singhal & T.N. Vallinayagam, JJ.

ITRC No. 327 of 1998

21st February, 2000

Counsel Appeared

M.V. Seshachala, for the Revenue

JUDGMENT

V.K. Singhal, J. :

The Tribunal has referred the following question of law arising out of its order dt. 3rd Aug., 1995, pertaining to the asst. yr. 1986-87 :

“Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in holding that ‘kist’ is neither duty nor tax and, therefore, will not come under the provisions of s. 43B of the Act ?”

2. The assessee is an excise contractor. In the assessment for this year, the AO disallowed under s. 43B, the “kist” amounts remaining outstanding as at the end of the relevant accounting year payable by the assessee to the Government. In appeal it was held that “kist” cannot be considered as tax or duty and, hence, the outstanding “kist” amount cannot be disallowed under s. 43B.

Aggrieved by the order of the CIT, the Department preferred an appeal before the Tribunal. The Tribunal, in its present order, has upheld the decision of the Tribunal in ITA No. 1234/Bang of 1988, dt. 9th June, 1994, in the case of D. Dasappa, Bangalore.

The question raised in the present matter is answered by this Court in CIT vs. Dasappa (2000) 163 CTR (Kar) 410 : (2000) 246 ITR 750 (Kar)—I.T.R.C. No. 5 of 1996, and other connected matters decided on 5th Jan., 2000. Accordingly, it is held that the Tribunal was justified in holding that the kist amount payable to the Government by the assessee could not be brought within the purview of s. 43B of the IT Act.

Reference is answered in favour of the assessee and against the Revenue.

[Citation : 250 ITR 407 ]

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