COMMNR. OF INCOME TAX, KERALA vs M/S. TRAVANCORE SUGARS & CHEMICALS LTD.

The Supreme Court addressed the applicability of Section 43B of the Income Tax Act regarding the disallowance of a vend fee of Rs. 22,87,512/- claimed by the respondent-assessee. The Court held that the Income Tax Appellate Tribunal correctly upheld the deletion of the disallowance since the vend fee was a liability payable to the Government of Kerala, and thus, the conditions of Section 43B were not met as the fee was not actually paid before the end of the accounting year. The appeal by the Commissioner of Income Tax was dismissed, affirming the lower court's decision.