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Appeal under disallowance made u/s 43B of the Income Tax Act

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Court :
ITAT Kolkata

Brief :
Both these appeals are filed by the assessee directed against separate orders of the Learned Commissioner of Income Tax (Appeals)-13, Kolkata, [hereinafter the “CIT(A)”], passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), for the Assessment Years 2013-14 & 2014-15. As the appeals belong to the same assessee firm, for the sake of convenience they are heard together and disposed off by way of this common order.

Citation :
ITA 270/KOL/2019

IN THE INCOME TAX APPELLATE TRIBUNAL
KOLKATA ‘A’ BENCH, KOLKATA

 (Before Sri J. Sudhakar Reddy, Accountant Member & Sri Aby T. Varkey, Judicial Member)

I.T.A. Nos. 269 & 270/Kol/2019
Assessment Years: 2013-14 & 2014-15
Mortex India................................Appellant
[PAN: AAFFM 1720 Q]

Vs.

ACIT, Circle-44, Kolkata.........................Respondent

Appearances by:

Sh. S. Agarwal, C.A., appeared on behalf of the Assessee.
Sh. Dhrubajyoti Ray, Sr. D/R, appeared on behalf of the Revenue.

Date of concluding the hearing : March 22nd, 2021
Date of pronouncing the order : April 21st, 2021

ORDER

Per J. Sudhakar Reddy, AM:

 Both these appeals are filed by the assessee directed against separate orders of the Learned Commissioner of Income Tax (Appeals)-13, Kolkata, [hereinafter the “CIT(A)”], passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), for the Assessment Years 2013-14 & 2014-15. As the appeals belong to the same assessee firm, for the sake of convenience they are heard together and disposed off by way of this common order.

2. We have heard rival contentions. On a careful consideration of the facts and circumstances of the case, perusal of the papers on record and the case law cited, we hold as follows.

3. We first take up the appeal in ITA No. 269/Kol/2019 for the AY 2013-14.

3.1. Ground no. 1 is against the disallowance made u/s 43B of the Act. The assessee submits that service tax which was paid to the service provider was payable to the Service Tax Department by the service provider only and not by the assessee. He submits that the service tax component was a part of a cost of services availed by the assessee and it was no service tax payable by the assessee firm to the Govt. of India. The ld. Counsel for the assessee further submitted that the assessee paid commission of ₹1,12,360/- which includes service tax of ₹12,360/- to the service provider and under these circumstances Section 43B of the Act was not applicable to the assessee. The ld. D/R submitted that the confusion was created because of the entries passed in the books of account where the service tax was separately shown.

3.2. In view of the above submissions, we hold that Section 43B of the Act does not apply to this payment on the facts and circumstances of the case and hence the disallowance made u/s 43B of the Act is hereby deleted.

4. Ground nos. 2 & 3 are against the ad-hoc disallowance made by the AO. The AO disallowed part of the expenses claimed by the assessee on ad-hoc basis on the ground that the expenses incurred for personal purposes cannot be segregated. The assessee failed to file supporting bills and vouchers before the AO. In our view, the decision of the AO as confirmed by the ld. CIT(A) on these two issues are ad-hoc and call for no nterference for the reason that no bills and vouchers were produced by the assessee before the AO. Thus we uphold the same and dismiss these grounds of the assessee.

4.1. The assessee has raised additional grounds in this appeal. There are legal grounds not requiring enquiry into any fresh facts. The additional ground is regarding the claim for deduction of educational cess paid. 

To know more in details find the attachment file
 

 

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on 11 May 2021
Published in Income Tax
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