TaxTMI 
TaxTMI 
2023 (9) TMI 1537
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....and on facts and circumstances of the case, the Ld. CIT(A) was justified in considering unpaid Service Tax as allowable in contravention of section 43B of the IT Act, 1961? 3. The order of the Ld. CIT(A) is erroneous both in law and on facts. 4. Any other ground that may be adduced at the time of hearing." 3. The brief facts of the case are that the assessee is engaged in the business of mechanical maintenance job, who had filed his return of income on 29.09.2013 showing the total income of Rs. 1,04,32,090/-. The case of the assessee was selected for scrutiny through manual selection as per clause 1(a) of instruction No. 6/2014 dated 02.09.2014 and accordingly, notice under Section 143(2) of the Act was issued on 12.09.2014. The return submissions towards the notices issued by the assessee examined by Learned AO. The case was discussed and the assessment order was framed with certain additions determining the total assessed income at Rs. 3,12,78,780/-. 4. Aggrieved by the order of Learned AO, assessee preferred an appeal before Learned CIT(A) wherein the only issue pertaining to disallowance of Rs. 2,02,96,683/- made in terms of violation of provisions of Se....
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....hoc disallowances on bed debt of Rs. 1,50,000/-( Para-4 page-2) * Disallowed Rs. 2,02,96,683 on account of service tax payable in view of section 438 of the Act.(Para-5 page-3) CIT appeal *Only ground of appeal is disallowances us 43B, hence, other issues are not adjudicated. (Para-1 page-2) *The CIT deleted disallowances u/s 438 as it is covered decision held by the ITAT, Raipur in ITA 174/BPR/2012 A.Y 2009-10. ITAT Form No.36 No delay Revenue relied on case law The decision held by the Honble Supreme court in civil appeal no 2833 in the case of Checkmate Services (P) Ltd Vs Commissioner of Income tax pronounced on Oct 12, 2022, it was held that the deduction shall be admissible only if the amount is paid within the due date as prescribed under those respective Act and not before the filing of ITR. Relevant part of the Act is as under: "For assessment years prior to 2021-22, non obstante clause under section 438 could not apply in case of amounts which were held in trust as was case of employee's contribution which were deducted from their income and was held in trust by assessee- employer as per section 2(24)(x....
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.... deduction per se in the form of statutory pay out. They are others' income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation were to be adopted, the non-obstante clause under section 43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee's contribution on or before the due date as a condition for deduction. 6. Contravening the submissions of Learned Sr. D.R., Learned AR of the assessee submitted that the issue in the present appeal has already been dealt with by the Co-ordinate Bench of ITAT, Raipur in ITA No.174/RPR/2012 for A.Y. 2009-10 dated 12-02- 2016, wherein the issue is decided in favour of the assessee by rejecting the ....
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....f CIT Vs Noble & Hewitt (India) (P) Ltd. (2008) 305 ITR 324 (Del.), the case of Chowringhee Sales Bureau P. Ltd. Vs CIT (1977) 110 ITR 385 (Cal.) has been distinguished and it was held that when the amount of tax has not been debited to profit & loss account as an expenditure nor claimed any deduction in respect of the said amount then, the question of disallowance u/s 43B of the IT Act does not arise. Respectfully, following this decision, we hereby hold that there was no fallacy in the view taken by the learned CIT (A). The same is hereby confirmed and ground No.1 of the appeal of the Revenue is, therefore, dismissed. " 6. In the light of above precedent, the issue as raked up by the revenue department now stood covered in favour of the assessee. Hence, we find no force in this ground of the revenue. Accordingly, we reject the same." 7. It was the further submission of Learned AR that the order pressed into the service of ITAT in the present appeal in assessee's own case as extracted hereinabove was duly considered by Learned CIT(A) and therefore, the addition was deleted. It was, thus, the prayer that the order of Learned CIT(A) deserves to be upheld. 8. With rega....
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.... that it only covers cases where the amount of tax, duty, cess or fee is actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. (d) In this case, the respondent-assessee has admittedly not paid or incurred any liability for the purposes of bringing any goods to the place of its location. In this case, the respondent-assessee is rendering services. Thus, on the plain reading of Section145A(a)(ii) of the Act, it is self evident that the same would not apply to the service tax billed on rendering of services. This is so as the service tax billed has no relation to any goods nor does it have anything to do with bringing the goods to a particular location. (e) The Explanation to Section 145A(a) of the Act does not expand its scope. An Explanation normally does not widen the scope of the main section. It merely helps clarifying an ambiguity. (See Zakiyr Begam v/s. Shanaz Ali & Ors., 2010 (9) SCC 280). The main part of the Section specifically restricts its ambit only to valuation of purchase and sale of goods and inventory. Rendering of service is not goods or inventory. Goods would mean movab....
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....evenue, is not sustainable. Therefore, Section 145A of the Act would have no application in cases where service is provided by the Assessee. (f) In view of the above, the question (i) as proposed does not give rise to any substantial question of law. Thus, not entertained." 10. Learned AR further place reliance upon the judgment by the Jurisdictional High Court of Chhattisgarh in the case of ACIT vs. M/s. Ganpati Motors dated 25.04.2017 in ITA No.30 of 2016, wherein Hon'ble Jurisdictional High Court has observed that since the VAT is not charged to Profit and Loss Account. Therefore, the liability even if still unpaid, the same cannot be disallowed being not claimed as deduction in the Books of Accounts. It was the submissions that the ratio of law pertaining to VAT is squarely applicable to service tax also. 11. We have heard the rival contentions and perused the material available on record and judicial pronouncements for consideration. Admittedly, the issue raised in the present appeal is already dealt with and decided by the Co-ordinate Bench of ITAT, Raipur in ITA No.174/BPR/2012 in A.Y. 2009-10 on 12.02.2016, therefore, the issue is squarely covered and accordi....