2016 (12) TMI 452

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....e carefully perused the submissions of the assessee and the material placed on record. In the assessment order the AO observed as under: * All the vouchers produced were unsigned * No bills were produced * No details of work done on the vouchers * Vouchers accompanied by similar computer printouts and some handmade written pages with names of persons to whom payments claimed to be made * No identity mark or proof of authenticity of such similar printouts. * No details or identity proof of persons to whom payments were claimed to be made. (II) The AO issued show cause notice u/s 145(3) of the Act and made an addition of Rs. 12 lac though the AO did not specifically rejected the books of accounts u/s 145(30 of the Act. (III) During the appellate proceedings the appellant was required to file copies of accounts of its two main customers i.e. Aircel Ltd. and Bharti Hexacon Ltd. as appearing in its books of accounts and one bill each raised by the appellant to these companies in relation to the claim or service tax as discussed earlier in this order. From these details, it has been observed that: The Appellant raised invoice....

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....e undertaken by the appellant. These are mostly persons doing the job at individual level, and hence no proper bills are given by them. Instead these persons submit either a handwritten slip or a computer printout for the work done by them may be on a monthly basis or once in two months, depending upon the volume of work done. This is a common practice looking into the nature of business of the appellant. Further, the appellant had submitted before the Assessing Officer that, such payments are made by it only by issuing cheques, and thus, the identity of the payees is established. Also, the Assessing Officer did not make an attempt to confirm the contention of the appellant by issuing summons to a few of such payees and verifying the claim of the appellant, before out rightly rejecting the books of the appellant, on pure assumptions and surmises, without appreciating the nature of business of the appellant. It is not the case of the Assessing Officer that, the expenses claimed by the appellant are excessive or bogus. Thus, rejecting books only on the ground that the vouchers were unsigned, or the bills were hand written is unwarranted and bad in law, especially when the books....

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....red by the assessee. Further, given the past history of the assessee, it is noted that it has disclosed N.P before depreciation at 10.75 % which is higher as compared to past two years. In light of above, we see no reason to interfere with the N.P rate declared by the assessee. Hence, the trading addition made on this account is deleted. 3. Now coming to ground no. 2, briefly the facts of the case are that during the assessment proceedings, it was observed by the AO that there was a difference of Rs. 80,79,713/- in the total receipts as per Form 26AS and as per P&L account filed by the assessee. It was submitted by the appellant before the AO that the difference was on a/c of service tax receipts by the assessee and the same has not been passed through P&L account. It was further submitted that the assessee has claimed Cenvat Credit of Rs., 78,84,332/- on account of service tax collected by the vendors from him and as such the difference of Rs. 9,95,381/- was reflected as service tax by the appellant in its balance sheet as on 31.03.2012. The appellant submitted before the AO that its claim of input Cenvat Credit of Rs. 78,84,332/- for the service tax charged by vendors from ....

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....and loss account as it had not paid the same within the stipulated time to the govt. account. It would be relevant to reproduce here the provisions of section 43B of the Act as under: Certain deduction to be only on actual payment. 43B Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of (a) any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or) Thus it is very clear that any tax by whatever name called is covered u/s 43B of the Act. It may be mentioned that in the case of Chowranghee Sales Bureau, the Hon'ble Supreme Court held that the Sales tax collected and not deposited with the treasury would form part of the assessee's trading receipt. In the instant case under consideration, the appellant had collected service tax from its clients but did not pay the same before the due date of filing of return of income. Therefore , the ratio in the case of Chowringhee Sales Bureau is clearly applicable to the facts of the instant case under consideration. It may be mentioned that the Hon'ble ITAT, Bangalore Bench in the ....

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....arned CIT (A) and further humbly submits that no deduction is claimed in the P/L a/c both as regards to Service Tax provided on services availed by the appellant as well as service tax charged by the appellant, hence the provisions of Sec 43B are not attracted: The appellant has not shown the receipts inclusive of service tax charged by it. Also no deduction on this account is claimed in the computation of income filed by it. The provision for service tax made by the appellant, on services availed by it has also not been debited to the P/L a/c. Thus, the P/L a/c is totally free off the burden of service tax. Sec 43B reads as under: "Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this act in respect of - [(a) any sum payable by the assessee by way of tax, duty, cess, or fee, by whatever name called, under any law for the time being in force, or] ................................................." It is submitted that sec 43B starts with a non-obstante clause, and specifies that a deduction "otherwise allowable" under the Act, shall not be allowed unless it is actually paid. This means that the claim has t....

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.... case of Chowringhee Sales Bureau (Supra), the Hon'ble Supreme Court has laid down the following proposition of law and the relevant observation are as under: 8. It is apparent from the order of the AAC and has not been disputed before us in the present case that in the cash memos issued by the appellant to the purchasers in the auction sale it was appellant who was shownas the seller. The amount realised by the appellant from the purchasers included sales tax. The appellant, however, did not pay the amount of sales tax to the actual owner of the goods auctioned because the statutory liability for the payment of that sales tax was that of the appellant. The appellant company did not also deposit the amount realised by it s sales tax in the State exchequer because it took the position that the statutory provision creating that liability upon it was not valid. As the amount of sales-tax was received by the appellant in its character as an auctioneer, the amount, in our view, should be held to form part of its trading or business receipt. The appellant would, of course, be entitled to claim deduction of the amount as and when it pays it to the State Government. 9. The fact that ....