Deletion of addition made towards disallowance of Service Tax written off account.

Last updated: 23 February 2021

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Quick Summary

This Income Tax Appellate Tribunal (ITAT) case concerns the disallowance of service tax written off by the tax authorities. The assessee, operating within a Special Economic Zone (SEZ), argued that they were exempt from service tax and therefore eligible for a refund of input service tax paid to suppliers. The ITAT's decision addresses whether this written-off amount should be disallowed as a deduction.

Court :
ITAT Chennai

Brief :
This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-13, Chennai, dated 17.11.2017 and pertains to assessment year 2010-11.

Citation :
ITA 1184/CHNY/2018

IN THE INCOME TAX APPELLATE TRIBUNAL
‘B’ BENCH, CHENNAI

BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND
SHRI G. MANJUNATHA, ACCOUNTANT MEMBER

ITA No.: 1184/CHNY/2018
Assessment Year: 2010-11

M/s. FIH India Private
Limited,
(formerly Foxconn India
Private Limited)
SIPCIT Hi-Tech SEZ, SIPCOT
Industrial Park, Phase-II, (NH-4)
Sunguvarchatram – 602 106
Sriperumbudur Taluk,
Kanchipuram District.
PAN: AAACF9390F
Appellant

vs.

The DCIT,
Company Circle – 2(1),
Chennai.
Respondent

Appellant by : Shri S.P. Chidambaram, Advocate
Respondent by : Shri Suresh Periasamy, JCIT

Date of Hearing : 20.01.2021
Date of Pronouncement : 08.02.2021

O R D E R

Per G. MANJUNATHA, AM:

This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-13, Chennai, dated 17.11.2017 and pertains to assessment year 2010-11.

2. The assessee has raised the following grounds of appeal:- The order of the Commissioner of Income Tax (Appeals) [“CIT (A)”] is contrary to law, facts and circumstances of the case.

2. Disallowance of service tax written off

2.1 The CIT (A) erred in confirming the disallowance made by the AO for the refund of input service tax written off amounting to Rs.51,65,869.

2.2 The CIT (A) failed to appreciate that the Appellant is operating in Special Economic Zone (SEZ) and as such it is exempt from service tax.

2.3 The CIT (A) ought to have appreciated that since the Appellant is not liable to service tax, the Appellant is eligible to claim the input service tax charged by the suppliers as refund from the Service Tax department.

To know more in details find the attachment file

FAQ :

The main issue was the disallowance of a service tax amount written off by the assessee, which the tax authorities had not permitted as a deduction.

The assessee claimed eligibility for a refund of input service tax because they operated within a Special Economic Zone (SEZ) and were therefore exempt from paying service tax.

The amount of input service tax written off that was disallowed was Rs. 51,65,869.

This appeal relates to the assessment year 2010-11.