TaxTMI 
TaxTMI 
2023 (3) TMI 766
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.... 1961 (in short 'the Act') dated 17.05.2019 for the assessment year 2018-19. The assessee has assailed the impugned order on the following grounds of appeal: "1. The learned NFAC erred in passing the order dated 14 July 2022 based on the surmise and conjecture. Accordingly, such order is bad in law and ought to be quashed. 2. The learned NFAC erred in not appreciating the facts of the appellant's case and hence the basis on which the proceedings are completed is not in accordance with the law. Ground No.3-Disallowance under section 43B-Rs. 25,06,246 3.1 The learned NFAC erred in upholding the disallowance of Rs.25,06,246 in terms of provisions of section 143(1) of the Act in the Intimation by invoking....
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.... has not paid income tax on the same. 3.8. The appellant submits that the learned NFAC/AO be directed to delete the disallowance made under section 43B with respect to VAT payable of Rs. 25,06,246 and to compute total income and tax thereon accordingly. Ground no.4 - Excess levy of interest under section 234A 4.1. The learned NFAC erred in not adjudicating on the ground of levying excessive interest under section 234A of the Act at Rs.8,490 as against correct amount of Rs.746 as computed by the appellant in the return of income. Ground no.5 - Excess levy of interest under section 234B 5.1. The learned NFAC erred in not adjudicating on the ground of levying excessive interest under section 234B of....
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..../s.43B of the Act by observing as under: "5.4. The reply of the appellant and the case laws relied on by the appellant have duly been considered. All the case laws relied on by the appellant have considered, among other issues, the issue of disallowance u/s.43B of the Income Tax Act. 5.4.1. The appellant deals in Cigarettes, Pan masala, Tea etc. 5.4.2. It is common knowledge and known to all consumers that while purchasing Cigarettes. Pan masala, Tea all the consumers pay VAT/GST/Sales tax to the seller. 5.4.3. The appellant while purchasing Cigarettes, Pan masala, Tea from the producers/whole sale dealers /distributors would have paid VAT/GST/Sales tax to the sellers. Similarly the appellant while making....
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....cash credit and the appellant has not paid the Income Tax on the same. Therefore there is merit in the addition made of Rs.25,06,246/-in the order u/s.143(1) dated 17.05.2019 and the same is hereby CONFIRMED. Goes without saying, as and when the appellant pays Rs.25,06,246/-, deduction u/s 43B would be allowed as deduction." 4. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before me. 5. I have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 6. Controve....
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....of the Hon'ble High Court are culled out as under: "2. Heard learned Counsel for the revenue and learned Counsel for the respondent-assessee. The fundamental issue that arises for decision is, as to whether a particular amount which is subject matter of the appeal is to be treated as relatable to Value Added Tax (VAT) payable by the assessee and, if so, whether it has to be actually paid by him before filing of the return under the Income Tax Act. This question is relevant, having regard to the manner in which the question of law has been framed. The issue as to whether Section 43-B of the Income Tax is attracted even when the assessee does not claim any deduction on the strength of that provision may also be relevant. 3. ....
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....collection would have been only of a composite amount. The transaction dealt with in Chowringhee's case (supra) related to auction and the nature of the income derived by an auctioneer in the process of auction. In contradistinction thereto, are the decisions of the High Court of Delhi in Commissioner of Income Tax v. Noble & Hewitt (India) (P) Ltd., 2008 305 ITR 0324, which make a nice distinction between Chowringhee's case and instances where Profit and Loss accounts and Service Tax accounts are maintained separately following mercantile system of accounting. As rightly noticed therein, it is not for the Income Tax department to make out a case relating to the correctness or otherwise of the mercantile system of accounting, resort....