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2017 (8) TMI 1288

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....case of service tax whereas the assessee himself has claimed Rs. 22,66,220/- as allowable service tax. 3. On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in restricting the addition of Rs. 29,48,389/- against the addition made by AO of Rs. 1,56,47,978/- without considering the fact that the assessee failed to discharge the onus of providing the genuineness of the creditors. 4. On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in deleting the addition of Rs. 1,73,289/- on account of sundry balances written off even though the assessee failed to give details of debtors which have become irrecoverable. 5. The appellant prays that the order of the Ld.CIT(A) on the above grounds be set aside and that of the A.O be restored. 6. The appellant craves leave to amend or alter any ground or add a new ground." 3. Since the facts and issues involved in both the appeals are identical, the same are being disposed of with this common order. 4. The short facts of the case are that assessee is a proprietor of M/s. Engineers, engaged in business of civil contractor. During the year under consideration, the assessee has d....

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.... the appel lant since in this case the AO has sent let ter s to the parties and the same have not been found at the given address or the ap pel l a nt does not even have t he abi l i t y to ide nt i f y the par t ies by providing address or otherwise. In this background it cannot he accepted that i f there i s l iabi l i ty exi sting in the books of the assessee then he would not even have been aware of the persons to whom such liability has to be discharged; if the contentions of the appellant is that he is not even aware of these creditors it would be reasonable to presume that such liability has become redundant in terms of these, the assessee's need/responsibility to disallow such liability. If the appellant is not even aware of the present address of the creditors and neither his creditors are making any efforts to recover its payments then how can the appellant claim that these are live liabilities? Out of the total list of 322 cases in 26 cases the AO has sent letters and some has been responded to. In the 26 cases (category 3 of the addition) the amount involved is Rs. 11,04,728/- and for this component the appellant gets relief on the basis of ratio of 3 judicial decis....

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.... 7. The Ld. D.R. submitted that the Ld. CIT(A) has deleted the addition on account of payment of Rs. 2,68,551/- to Mr. Manoj Kumar Choudhaury 2 HYD, payment of Rs. 1,64,500/- to M/s. Sainath Enterprises. Wherein Ld. CIT(A) has verified that assessee has made payment by cheque, therefore it does not come under the purview of section 41(1) of the Act. But the assessee failed to give the address of these parties, therefore genuineness of these transactions is in doubt. The Ld. D.R. relied upon the order of AO. 8. We have heard the rival contentions of both the parties. In respect of Mr. Manoj Kumar Choudhaury 2 HYD, the assessee has received the payment by cheque of Rs. 2,68,551/- through bank account and payment of Rs. 1,64,500/- to M/s. Sainath Enterprises which is also by cheque. Therefore, Ld. CIT(A) is justified in holding that section 41(1) of the Act is not applicable. We find that both the parties have received the payment of cheques. Therefore, Ld. CIT(A) is justified in his action and our interference is not required. 9. In the result, this issue of departmental appeal is dismissed. 10. In respect of assessee's appeal, the Ld. A.R. submitted that assessee is a contractor.....

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....ideration and their liability was existing up to A.Y.2013-14. Therefore, we restore this matter back to the file of the AO to verify the same and decide the issue afresh in light of the above chart. 14. In the result, appeal of the assessee is allowed for statistical purposes. ITA No.2867/M/2014 (Assessee's appeal) 15. The AO has verified the computation of income regarding the income from business and profession. 16. The brief facts of the case are that the assessee has filed the return of income declaring total income of Rs. 2,88,17,990/- and disallowed outstanding service tax liability under section 43B in computation of income. On going through the IT return, the service tax payable in the balance sheet on 31.03.09 for the preceding year was not disallowed under section 43B of the Act in computation of total income, since the service tax was not being routed through profit & loss account but due to the tax audit report, it was disallowed in computing the total income ended on 31.03.09 of Rs. 1,17,88,995/-. The assessee has routed the service tax liability via balance sheet and same has not been debited to profit & loss account. Therefore, AO has made the addition of Rs. 88....

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.... is already due. A plain reading of rule 6 of the Service Tax Rules would show that service provider becomes liable to make the payment of service tax by the 5th of the month immediately following the calendar month in which the payments are received towards the value of taxable service. The first proviso provides for an exception in case of individuals or proprietary /inns or partnership firms; and in such cases, service tax has to be paid to the credit of the Central Government by the 5th of the month immediately following the quarter of calendar year in. which the payments are received. The only difference is that in case of individual or proprietary or partnership firm, payment has to be made on 5th of the following month after the following quarter of calendar year whereas in the case of other organizations it has to be paid on the 5th of the month immediately following the calendar month. But in both the cases, the liability arises to make the payment only after the service provider has received the payments. If there is no liability to make the payment to the credit of the Central Government because of non-receipt of payments from the receiver of the services, then it cannot....