Sushil Harkauli, J. - (1.) WE have heard learned counsel for the Income Tax Department. The question referred in this case is:- "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is legally correct in holding that liability relating to the employeer's contribution to Provident Fund, Family Pension, State Insurance and Deposit Linked Insurance is not disallowable u/s 43-B of the I.T. Act, 1961?"
(2.) THE issue precisely is whether the contribution payable, but not actually paid, is entitled to be claimed as deduction by the employer/assessee. The words of Section 43 B in the title to that section, as also at the end of that section limit the allowing of deductions only to actual payments. Reliance is placed in the Tribunal's order, upon a decision of the Andhra Pradesh High Court in the case of S.Subba Rao and Co and others Vs. Union of India (1988) 173 ITR 708, for the conclusion that deductions can be made although actual payment has not been made, if the contribution is payable.
(3.) THE Andhra Pradesh High Court has not held any such proposition in that decision and the Tribunal's order dated 6.10.1989 is based upon a total misreading and misapplication of that decision. The view taken by the Karnataka High Court in the case of CIT Vs. Amco. Batteries (2006) 287 ITR 80 at the end of para 7 of that law report lays down the correct law in the following words:- "Therefore, unless the aforesaid sums are paid, as a matter of fact, the employer/ assessee is not entitled to claim deductions." ;