ALLIED MOTORS (P) LTD. vs COMMISSIONER OF INCOME-TAX, DELHI.

The Supreme Court interpreted Section 43B of the Income-tax Act, 1961, determining that sales-tax collected by an assessee and paid after the end of the relevant previous year, but within the time allowed under sales-tax law, is not deductible while computing business income for that previous year. The Court held that deductions under Section 43B are only permissible upon actual payment, reinforcing the principle that tax liabilities must be settled in the year they are incurred. The appeals were dismissed, affirming the lower courts' decisions.