Shri Gajanand Labour Contractor,, ... vs Department Of Income Tax
- CitationITA No. 2442/Ahd/2011
Ratio decidendi
The rule this decision rests on
The tribunal's disposition rests on the principle that a disallowance under Section 43B cannot be sustained where the record does not establish that the amount in question was claimed as a deduction in the relevant year, so that the basis for the addition is absent. On the facts as found, the assessee's submission that the service tax payable had not been debited to the Profit and Loss account was not conclusively rebutted, and the tribunal treated the question of whether the liability was claimed as an expenditure in the year under consideration or in an earlier year as a factual matter requiring fresh examination. Where the assessing authority's addition depends on a factual premise (here, that the amount was claimed as expenditure) that the record leaves unresolved, the matter must be remitted to the Assessing Officer for fresh adjudication after affording the assessee an opportunity of hearing and requiring it to furnish the information called for, rather than being decided either way on the existing material.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
The I.T.O., M/s. Shri Gajanand Labour Ward 9 (1), Vs Contractor, Ahmedabad At:- Modasar, Sanand Bavla Road, Sanand, Ahmedabad PAN : AAXFS 7607 N
अपीलाथ / अपीलाथ / (Appellant) ू यथ यथ / थ / (Respondent)
Revenue by : Shri M.K. Singh, Sr. DR. Assessee(s) by : Shri N. C. Amin, AR
सुनवाई क# तार%ख/ / Date of Hearing : 26/02/2015 घोषणा क# तार%ख /Date of Pronouncement: 13/03/2015
आदे श/O R D E R
PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER:
This appeal filed by the Revenue is against the order of the Commissioner of Income Tax (Appeals)-XV, Ahmedabad dated 07.07.2011 for Assessment Year 2008-09.
2. The brief facts of the case, as culled out from the records are as under:-
3. The assessee is a partnership firm stated to be engaged in the business of supply of manpower. The assessee filed its Return of Income for Assessment Year 2008-09 on 29.09.2008, showing total income of Rs. Nil after adjusting the brought forward losses. The case was selected for scrutiny and thereafter, the assessment was framed u/s 143(3) of the Act ITA No. 2442/Ahd/ 2011 Shri Gajanand Labour Contractor AY 2008-09
-2-
vide order dated 30.11.2010 and the total income, before set off of brought forward losses, was determined at Rs 14,87,178/-. Aggrieved by the order of Assessing Officer, the assessee carried the matter before the Ld CIT(A) who vide order dated 07.07.2011 granted partial relief to the assessee. Aggrieved by the aforesaid order of the Ld CIT(A), the Revenue is now in appeal before us and has raised the following grounds:-
1. The Ld. Commissioner of Income-tax (Appeals)-XV, Ahmedabad has erred in law and on facts in deleting the addition of Rs.14,27,603/- made by the Assessing Officer on account of outstanding Service tax liability.
2. On the facts and in the circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals)-XV, Ahmedabad ought to have upheld the order of the Assessing Officer.
3. It is, therefore, prayed that the order of the Ld. Commissioner of Income-
tax (Appeals)-XV, Ahmedabad may be set-aside and that of the Assessing Officer be restored.
4. The only issue is with respect to deletion of addition on account of outstanding service tax. During the course of assessment proceedings, on perusing the Balance-sheet, the Assessing Officer noticed that the assessee had shown service tax payable of Rs.14,27,603/- and was paid after due date of filing of Return of Income. The Assessing Officer was of the view that in view of the provisions of Section 43B, since the amount has not been paid into the Government account before the due date of filing the Return of Income, the unpaid service tax is assessable as income in the hands of the assessee. He, accordingly, added the outstanding service tax liability of Rs.14,27,603/- as income of the assessee.
5. Aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A) who deleted the addition by holding as under:-
ITA No. 2442/Ahd/ 2011 Shri Gajanand Labour Contractor AY 2008-09
-3-
"7. Ground N.7 states that the service tax payable of Rs.14,27,603 has not been claimed as expenditure in P&L account. Perusal of the assessment order shows that the AO presumed that the appellant has claimed deduction of this amount though the appellant has shown this amount in the balance sheet as outstanding. The ld. AR cited the P&L account where no such deduction had been claimed on account of service tax paid or payable. As the appellant has not claimed any deduction of service tax in my view there is no rationale of making the addition. The AO is directed to delete the addition."
6. Aggrieved by the aforesaid order of the ld. CIT(A), the Revenue is now in appeal before us. Before us, Ld. Departmental Representative supported the order of the Assessing Officer. On the other hand, ld. Authorized Representative submitted that the service tax is not debited to the Profit and Loss account and the assessee has not claimed any deduction and therefore, there was no question of making any disallowance u/s 43B of the Income-tax Act. He also placed on record a copy of the balance-sheet.
7. We have heard the rival submissions and perused the material available on record. Before us, it is assessee's submission that the service tax payable of Rs.14,27,603/- which is shown in the balance-sheet as on 31st March 2008, has not been claimed as an expenditure. Before us, on a query raised by the Bench, the ld. AR could not satisfactorily give the break-up of the service tax payable as to whether it pertained to the year under consideration or was of earlier period. Further, he could also not demonstrate the corresponding receipts, which were reflected in the Profit and Loss account, on which the liability of service tax payable was shown by the assessee. The major amounts in the Profit & Loss account for the year ended 31.03.2008 are said to be on account of reimbursements of various expenses and the income from service charges is stated to be of only Rs.2.76 lacs. Further there is no finding by CIT(A) that whether the ITA No. 2442/Ahd/ 2011 Shri Gajanand Labour Contractor AY 2008-09
-4-
amount was claimed as an expenditure in earlier years. In view of the aforesaid facts, we are of the view that the issue needs to be re-examined at the end of the Assessing Officer. We, therefore, remit the issue to the file of the Assessing Officer to decide the issue afresh in view of the foregoing & in accordance with law and after considering the submissions of the assessee. The assessee is also directed to furnish all the required information called for by the Assessing Officer promptly. Needless to state that that the Assessing Officer shall grant adequate opportunity of hearing to the assessee. Thus, this ground of the Revenue is allowed for statistical purposes.
8. In the result, the appeal of the Revenue is allowed for statistical purposes only.
Order pronounced in the Court on 13th March, 2015 at Ahmedabad.
Sd/- Sd/-
(SHAILENDRA KUMAR YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 13/03/2015 *Biju T, PS
आदे श क# ूितिल+प अमे+षत/Copy षत of the Order forwarded to : 1. अपीलाथ / The Appellant 2. ू यथ / The Respondent. 3. संबिं धत आयकर आयु- / Concerned CIT 4. आयकर आयु-(अपील) / The CIT(A)-XV, Ahmedabad 5. +वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER,
//TRUE COPY//
उप/
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण, अिधकरण, अहमदाबाद / ITAT, Ahmedabad
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free