S.N. ROTHO, A.M. This appeal has been filed by assessee against order dt. 1st May, 1985 of CIT (A) relating to asst. yr. 1984-85. assessee is company and assessment year involved in this appeal is 1984-85 with year ended on 31st June, 1984 as relevant previous year. only ground taken in this appeal states that disallowance of sum of Rs. 23,918 under s. 43B of IT Act, 1961 (hereinafter referred to as Act) was not justified. ITO found that assessee had shown aforesaid sum of Rs. 23,918 as amount due to Sales Tax Department in its balance sheet under Sundry creditors. ITO observed that this amount was collected during year but not paid during year and so he added back said sum invoking provision of s. 43B of Act. assessee appealed to CIT (A) who confirmed action of ITO on ground that sale tax collected by assessee represented part of its sale proceeds and so same had to be included in sales. sum of Rs.23,918 remained unpaid as at end of previous year because it represented collection made in last quarter of previous year under consideration. Even so, CIT (A) held that it became taxable because of provision of s. 43B of Act which prohibits deductions of unpaid amount of expenses. Shri. A. Pasayat, ld. representative for assessee, urged before us that Revenue authorities have erred in their decision. In this connection, he relied on decision dt. 14th Aug. 1985 of this Bench of Tribunal in IT Appeal No. 294 (Cuttack) of 1985 wherein similar matter has been decided in favour of assessee. He explained that assessee was collecting sales tax and paying same quarter after quarter in accordance with provisions of Sales Tax Act. amount collected in one quarter is payable within first half of immediately following quarter. assessee has been following this practice since several years. Even sum of Rs. 23,918 has been paid in subsequent year just as similar amount collected in March, quarter of preceding year was paid at beginning of previous year under consideration. He stated that in view of this consistent method of accounting followed by assessee, there is no difference to Revenue in long run. He urged that regular practice cannot be upset merely because s. 43 D of t h e Act which relates to deduction of expenses while computing income under s. 28 of Act has been enacted. He pointed out that amount under consideration was not claimed as deduction and s. s. 43B of Act did not come into play. Shri P. Thiagarajan, ld. representative for Department, on other of CIT (A). He stated that assessee could not maintain one method of accounting relating to part of sale proceeds and another method of accounting relating to another part of sale proceeds. According to him, sales tax was part of sales and no separate method of accounting can be adopted in separate method of accounting can be adopted in respect thereof. We have considered contentions of both parties as well as facts on record. It is not in dispute that assessee had not claimed amount under consideration as deduction. Hence, s. 43B of Act does not apply to facts of this case. It is true that sales tax forms part of sale proceeds against which sales tax paid or payable by assessee has to be allowed as deduction. In case of Chowringhee Sales Bureau (P) Ltd. vs. CIT 1973 CTR (SC) 44: (1973) 87 ITR 542 (SC), assessee collected sales tax but did not pay same to Government for several years. That was not case of collecting sales tax and paying same quarter after quarter within prescribed dates under law. On other hand, in case before us assessee has been paying sales tax within statutory dates. assessee did not contest payment of sales tax. Nor did it postpone payment of sales tax. Nor did it postpone payment beyond statutory dates. In fact, CIT(A) has recorded in his order that amount under consideration was not deposited by assessee during year under consideration because it was n o t payable within that year. amount cannot be paid unless it has first become payable. assessee was following mercantile system of accounting but so far as sales tax collections are concerned, they have been accounting but so far as sales tax collections are concerned, they have been kept in separate account. When law permits payment of tax some time after they are collected, then some amount is bound to remain unpaid on date when assessee closes its accounts. If amount is taken as sale proceeds consistently it would make no difference in long run. Similarly, if said amount is not taken as part of sale proceeds of year of collection, then also it would not make any difference in long run. All that has to be seen is whether unpaid amount was really paid within statutory date so that it ceased to be income. In other words, even if it is regarded as income, it is to be allowed as expenditure in year in which it has become payable under law. Since assessee has been following this method of accounting regularly year after year, we do not see any reason to depart from same during year under consideration. We find support for this conclusion of ours in decision of Special Bench of Tribunal in case of American Express International Banking Corpn. vs. IAC (1984)18 TJ (Bom) 218 (SB): (1983) 6 ITD 373 (Bom)(SB). Though sales tax collections are deemed to be part of sale proceeds, they form category different from ordinary sales. It is well settled that assessee may choose one system of accounting for certain transactions and another system for other transactions vide decisions in cases of Shiv Prasad Ram Sahai vs. CIT (1966) 61 ITR 124 (All) and Snow white Food Products Co. Ltd. vs. CIT (1982) 29 CTR (Cal) 8: (1983) 141 ITR 861 (Cal). For above reasons, we do not find much force in arguments raised on behalf of Department while we find enough force in contention raised for assessee. similar view has been taken by Ahmedabad Bench of Tribunal in case of ITO vs. Thakersi Babubhai & Co. (1986) 26 TTJ (Ahd) 517. budget speech of Finances Minister published at (1983) 33 CTR (TLT) 1: (1983) 140 ITR (ST) 31 also shows that s. 13B is not intended to be applied against assessee like instant one who do not indulge in practice o f withholding payment of legitimate dues to Government beyond statutory dates. Consequently, we hold that sum of Rs. 23,918 deserves to be deleted from total income of assessee and assessment deserves to be modified accordingly. In result, appeal is allowed. *** KAPOOR MOTOR ENGINEERING (P) LTD. v. INCOME TAX OFFICER