TaxTMI 
TaxTMI 
2026 (9) TMI 1525
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....y of GST and Service Tax of Rs. 38,24,902/- which was not paid on or before the filing of return of income, therefore, the same was disallowed u/s 43B of the Act. Besides this the assessee claimed interest on service tax and interest on TDS of Rs. 1,52,862/- which were disallowed u/s 37(1) being penal in nature. There was difference in the income declared and the details of receipts filed before the AO, therefore, the AO made the additions of the differential amount of Rs. 3,50,364/- u/s 69C as unexplained payment of commission and further of Rs. 70,15,077/- as the difference in the income shown by the assessee. Besides this a sum of Rs. 24,25,457/- was disallowed u/s 40A(3) of the Act being paid in cash in excess of the limit of Rs. 10,000/- prescribed. Accordingly, total income of the assessee was assessed at Rs. 1,48,20,222/-. 3. Aggrieved by the said order, assessee preferred an appeal before the Ld. CIT(A), who has partly allowed the appeal of the assessee wherein the interest of late deposit of service tax was deleted and remaining additions/disallowances were confirmed. 4. Against the said order, the assessee is in appeal before the Tribunal by taking following grounds....
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....e not applicable. The assessee placed reliance on the judgment of Hon'ble Supreme Court in the case of Allied Motors (P) Ltd. vs. CIT reported in 224 ITR 677 (SC) and Noble & Hewitt (I) Pvt. Ltd. reported in 305 ITR 324 (Del.) wherein it is held that if the Service tax was not routed through Profit & Loss Account, and no expenditure was claimed, provision of section u/s 43(b) of the Act could not be applied. 8. After considering the facts of the case, we find that section 145A has been amended w.e.f. 1st April, 2018 by Finance Act, 2018 and relevant memorandum explaining the amendment is as under: "These amendments will take effect from 1st April, 2018. Clause 45 of the Bill seeks to substitute new sections 145A and 145B for section 145A of the Income-tax Act relating to method of accounting in certain cases and taxability of certain income: The proposed new section 145A provides that for the purpose of determining the income chargeable under the head "Profits and gains of business or profession", (i) the valuation of inventory shall be made at lower of actual cost or net realisable value in accordance with the income computation and disclosure standards notifi....
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.... "Method of accounting in certain cases. 145A. Notwithstanding anything to the contrary contained in section 145,- (a) the valuation of purchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession" shall be (i) in accordance with the method of accounting regularly employed by the assessee, and (ii) further adjusted to include the amount of any tax, duty, cess or fee (by whatever name called) actually paid or incurred by the assossoo to bring the goods to the place of its location and condition as on the date of valuation. Explanation-For the purposes of this section, any tax, duty, cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment; (b) interest received by an assessee on compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received." 8.2 From perusal of pre-amended and post amended section 145A, it is observed that old provisions di....
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....amended law, we do not find force in the arguments of the Id. AR of the assessee. Based on the above observations of the law the case law relied upon are also differentiated. The ld. CIT(A) has given detailed finding citing the judgement of the Hon'ble Apex court in the case of Chowringhee Sale Bureau (P) Ltd Vs. CIT 87 ITR 542. 9. In the instant case as assessee has not disputed the fact that service tax and GST were paid after filing of return, though the amounts were collected from the customers and, therefore, as per section 43B the same is deemed income in the hands of the assessee. In view of above discussion, and by respectfully following the judgement of hon'ble Apex court, the disallowance made by the AO is hereby confirmed. The grounds of appeal No. 3 of the assessee is dismissed. 10. Ground No. 4 is with regard to the addition of the Rs. 3,50,364/- made towards the difference between the commission expenses claimed and as per the tax deducted u/s 194H of the Act. 11. Heard the parties and perused the material available on record. It was the claim of the assessee that a sum of Rs. 8,42,227/- was debited in commission account however, TDS was made on the gross pay....
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....eceipts of VISA charges paid to various Embassies. Considering the facts in the instant case, we set aside the issue to the file of the AO for making verification of the claim of the assessee that the payments made in respective each individual is less than the limit prescribed u/s 40A(3), decide the issue in accordance with law. Ground of appeal No.5 is allowed for statistical purposes. 15. Ground No.6 of the assessee is with respect to the confirmation of the disallowance of interest on TDS of Rs. 17,961/-. 16. Heard the parties and perused the material available on record. Assessee has paid interest on delayed payment of TDS, since, TDS is part of the tax and, therefore, interest charges on delayed payment in penal in nature and cannot be held as expenditure u/s 37(1) of the Act, accordingly, we hereby upheld the disallowance. Ground of appeal No.6 of the assessee is dismissed. 17. Ground No.7 of the assessee with respect to the confirmation of addition of Rs. 70,15,077/- being difference between the receipts declared and as per Form 26AS. 18. Heard the parties and perused the material available on record. The AO has made the addition of the gross receipt shown by th....