2022 (9) TMI 145

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.....2015 as per the Books of Accounts of the assessee was as follows: WDV AS ON 01.04.2014 3,57,47,371 ADDITION:   MORE THAN 180 DAYS 7,51,689 LESS THAN 180 DAYS 9,45,822 GROSS VALUE( A) 3,74,44,882 LESS: DEPRECIATION   FULL RATE @10%- RS.(3,57,47,371+7,51,689) 36,49,906 HALF RATE @5% RS.9,45,822 47,291 TOTAL DEPRECIATION( B) 36,97,197 NET WDV AS ON 31.03.2015 (A-B) 3,37,47,685 WDV AS ON 01.04.2015 3,37,47,685 ADDITION:   MORE THAN 180 DAYS   LESS THAN 180 DAYS 15,28,784 GROSS VALUE( A) 3,52,76,469 LESS: DEPRECIATION   FULL RATE @10%- RS.3,37,47,685 33,74,768 HALF RATE @-5% RS.15,28,784 76,439 TOTAL DEPRECIATI....

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....the balance sheet and Closing W.D.V. as on 31/03/2016 Is Rs.2,81,88,000/-. Therefore the excess depreciation of Rs. 3,19,208/- is disallowed and added back. The assessee's letter uploaded on 10/12/2018 is not taken into consideration, which is contradicting to the Schedule DOA filed with the return of income." 4. Before CIT(A), the assessee contended that the learned A.O. has taken the value as determined in the valuation report prepared for the purpose of the working out the share premium in allowing the depreciation. It was submitted that this is not in accordance with the provisions section 43(1)(6) of the Income Tax Act, 1961 (Act) according to which the actual cost of asset as adjusted for interest payments and forex variations,....

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....e and hence, the same is directed to be deleted. 7. The next issue is with regard to addition made of Rs.29,00,637/- being unpaid service tax liability under section 43-B of the Act. The AO found that service tax payable was shown in the balance sheet as outstanding liability and had not been paid. When the assessee was asked to explain as to why the sum of Rs.29,00,637/- be disallowed under section 43B, the assessee has replied that since the service tax payabale as shown in the balance sheet was not debited to the profit and loss account and hence not disallowed in the computation of total income. The assessee's claim was not accepted by the AO for the reason that as per Section 43B(a) of the Act, 'Certain deductions are to be ....

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.... have had to be debited to Profit & Loss Account and thereafter the assessed could claim a deduction thereon. The Commissioner relied upon decision of the Calcutta High Court in Chowringhee Sales Bureau (P) Ltd. v. CIT. In appeal, the Tribunal was of the opinion that in view of the provisions of Section 43B of the Income Tax Act, 1961 ('Act'), since the assessed had not claimed a deduction there was no question of disallowing the deduction which was not even claimed. The relevant extract of Section 43B of the Act reads as follows: Sec.43B: Certain deductions to be only on actual payment. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of Ads b....

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....ed by the SMC Bench in the case of M/s. Wyzmindz Solutions Private Ltd., Vs. The ITO ITA No.3417/Bang/2018 order dated 30.1.2020 is a case where the Bench decided the issue based on the principle laid down in Chowringhee sales Bureau case 110 ITTR 385(SC). That decision has been explained and distinguished by the Hon'ble Delhi High Court as not applicable to the provisions of Sec.43B of the Act. In view of the decision of the Hon'ble Delhi High Court in the case of Noble & Hewitt India (P) Ltd., we are of the view that the said decision is not relevant and applicable to the facts of the case. 11. In the case of Boraiah Shivanajaiah Vs. ACIT ITA No.680/Bang/2020 order dated 11.4.2022, the decision rendered in the case of M/s. Wyzmindz Sol....