Commissioner of Income Tax vs Minda Wirelinks Pvt. Ltd.

The finding of the Tribunal, in this appeal, which pertains to the assessment year 2003-04, is that the sales tax liability was converted into a loan on March 24, 2003, a date which falls within the relevant assessment year. In view of the aforesaid position, we do not think the assessee can be denied the benefit and the expenditure/deduction is to be allowed u/s 43B of the income tax Act, 1961, in the year in question. It is not disputed that the circular issued by the Central Board of Direct Taxes permits and allows sales tax liability, which is converted into a loan to be set off in the year in which the liability is so converted and the Government order is issued. In the present case, the order was passed on March 24, 2003, when the conversion was allowed. We are not concerned and required to examine hypothetical question, whether an assessee is entitled to claim deduction in the year when the order is communicated or comes to his knowledge. The question/issue is left open. In the present case, the liability was so converted in the year in question. No substantial question of law arises for consideration. The appeal is dismissed.