TaxTMI 
TaxTMI 
2022 (12) TMI 691
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.... by the AO u/s 43B of the I. T.Act , 1961 on account of non depositing of Service Tax till 29.09.2012 i.e., before the due date of filing of its return of income, as per Annexure-IV of the 3CD Report. The Service Tax collected from the clients but not paid to the Service Tax Deptt. is an income of the assessee irrespective of the fact whether or not the Service Tax is routed through P&L Account of not." 3. Brief facts of the case are that in this case, in the order passed under section 143 (3) of the Income-tax Act, 1961 (for short 'the Act'), AO noted that there were unpaid service tax amounting to Rs.1,79,91,057.80. AO opined that provisions of section 43B are applicable. He made the impugned addition by concluding as under : - ....
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.... date of filing of the return of income u/s 139(1). It is to be noted that the service tax collected on services rendered, is a liability collected on behalf of the Government to be deposited to the credit of the Government account. It is not treated as an income nor is payment thereof treated as charge against profit or expenses in the Profit & Loss Account of the assessee. In fact, it is not routed through Profit & Loss Account at all and never forms part of any head of income/ expenditure. It is neither an expense nor a deduction or a charge against the profits of the assessee. It is neither credited and included in income at the time of receipt nor it is debited at the times of paying to the Government. In our case service tax ....
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....rnment to be deposited to the credit of the Government account. It is not treated as an income nor the payment thereof is treated as charge against profit or expenses in the Profit & Loss account of the assessee. He noted that it is not routed through P&L account at all and never forms part of any head of income or expenditure. That it is a liability for the company and it has to be paid to credit of the Government account to extinguish the said liability. Therefore, he directed that the addition be deleted. 6. Against this order, Revenue is in appeal before us. We have heard both the parties and perused the records. 7. Ld. Counsel of the assessee submitted that the issue is squarely covered in favour of the assessee by several case laws ....
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....owing decisions. 6. (I) ACIT V. Real Image Media Technologies (P) Ltd. 114 ITD 573 (Mad.) (II) CIT V. Noble & Hewitt India Pvt. Ltd. 166 Taxman 48 (DELHI). 7. Ld. Departmental representative on the other hand could not rebut the submissions of the Ld. Counsel of the assessee. 8. We have carefully considered the submissions. We find that in the case of ACIT V. Real Image Media Technologies Pvt. Ltd. (Supra) the tribunal had as under :- "(1) S. 43B starts with the non-obstante clause and specifies that the education "otherwise allowable" under the Act shall not be allowed unless it is actually paid. The rigour of S. 43B might be applicable to excise or sales tax, but the same could not be applicable in the case of servive tax due ....