Appeal allowed for statistical purposes; issues of disallowed fees remanded for proper examination.

The appeal was allowed for statistical purposes. The issues of disallowance of architect fees, brokerage expenses, sales tax, and service tax paid were remanded to the Assessing Officer for proper examination and consideration of evidence provided by the assessee.

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Issues Involved:
1. Disallowance of architect fees and brokerage expenses
2. Disallowance of sales tax and service tax paid

Analysis:

Issue 1: Disallowance of architect fees and brokerage expenses
The appellant contested the disallowance of architect fees and brokerage expenses by the Assessing Officer, arguing that necessary evidence was not requested before the disallowance was made. The CIT(A) upheld the disallowance citing lack of evidence provided by the assessee. The Tribunal noted that the Assessing Officer did not seek proof of expenses before disallowing them. As the appellant was not given an opportunity to furnish supporting evidence, the Tribunal directed the issue to be remanded to the Assessing Officer for the assessee to provide necessary evidence.

Issue 2: Disallowance of sales tax and service tax paid
The appellant claimed that the sales tax and service tax debited into the profit & loss account were paid on sales made by the assessee and that the composite method of tax payment was followed, where taxes were not collected from customers. The Assessing Officer and CIT(A) disallowed these taxes as expenses, stating they were not deductible. The Tribunal found errors in this disallowance, emphasizing that sales tax and service tax are deductible if paid by the assessee without collecting them from customers. As the records did not clarify whether taxes were collected from customers, the Tribunal remanded the issue to the Assessing Officer for further investigation. If it is found that the assessee followed the composite method of tax payment without collecting taxes from customers, the taxes paid will be allowed as deductible expenses.

In conclusion, the appeal was allowed for statistical purposes, and the issues of disallowance of architect fees, brokerage expenses, sales tax, and service tax paid were remanded to the Assessing Officer for proper examination and consideration of evidence provided by the assessee.

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