2020 (7) TMI 777

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....e "Act") dated 15/01/2016. 2. At the time of hearing none appeared on behalf of assessee in spite of issuance of notice for hearing more than one occasion and Ld. Departmental Representative(DR), was present for the appellant Revenue. In the absence of any appearance by the assessee, the appeal is being disposed of ex parte qua the assessee, after hearing Ld. DR for the Revenue on merits in terms of Rule 24 of the Income Tax Appellate, Tribunal, Rules, 1963. 3. The grounds of appeal raised by the revenue are as follows: 1. That on the facts and circumstances of the case, whether the Ld. CIT(A) was correct in deleting the disallowances of outstanding service tax liability of Rs. 1,89,52,413/- when the assessee had failed squar....

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....of section 43B of the Act since the same was not routed through Profitand Loss Account and for this the assessee relied on various judicial pronouncements. 5. However, Assessing Officer was of the view that as per the provisions of clause (a) of section 43B read with proviso to section 43B, there is no ambiguity that any sum payable by the assessee by way of tax, duties, cess or fee, by whatever name called under any law shall be allowed as deduction only in the year in which such sum is paid by the assessee or if it is paid before the due date of filling of return and evidence of such payment is furnished along with the Income Tax Return (ITR). In this context, the assessee was therefore, asked to explain vide a show cause notice dated ....

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....allowance of service tax liability of Rs. 1,89,52,413/-. The A.O. has made the addition as the liability of service tax was not paid before the due date of filing of I.T. Return. The A/R emphasized that the service tax liability has not been taken through the P & L A/c. Therefore, disallowance u/s.43B can't be made. This is based on principle that since service tax receipts has not been routed through P & L A/c. Therefore, it does not form part of receipt and since it does not part of the trading receipt, therefore, disallowance u/s.43B could not have been made. In the remand report, the A.O. has emphasized that service tax liability has been paid in subsequent years and only part of the amount has been paid and some amount was waived by th....