M/S TRIG SECURITY & INTELLIGENCE PVT LTD.,JSR vs. ITO WRD-3(2), JSR

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ITA 13/RAN/2019Status: DisposedITAT Ranchi23 September 2020AY 2014-153 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal accepted the assessee's plea in principle, noting that the service tax was not routed through the profit and loss account. The issue was restored to the Assessing Officer for factual verification of the profit and loss account.

What were the facts?

The assessee claimed service tax of Rs. 7,30,708/-. The lower authorities disallowed this claim on the grounds of non-payment in the relevant year, invoking Section 43B of the Act. The assessee argued that the service tax was not routed through its profit and loss account.

What were the issues?

Whether service tax not routed through the profit and loss account is allowable as a deduction under Section 43B of the Income Tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 43B

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Income Tax Appellate Tribunal, RANCHI, “E” COURT, AT KOLKATA

Before: SHRI J. SUDHAKAR REDDY, AM & SHRI S.S. GODARA, JM

For Appellant: Shri Devesh Poddar, Advocate
For Respondent: Shri N. S. Khalko, JCIT
Hearing: 02/09/2020Pronounced: 23/09/2020

आदेश / O R D E R Per Shri S. S. GODARA, JM:

1.

The assessee’s appeal for assessment year 2014-15 arises against the CIT(A)- Jamshedpur’s order dated 23/06/2017, passed in case no148/JSR/2016- 17 involving proceedings u/s 143(3) of the Income Tax Act, 1961 ( in short the ‘Act’). Heard both the parties. Case file perused.

2.

The assessee’s sole substantive grievance raised in the instant lis seeks to reverse both the learned lower authorities’ action disallowing / adding alleged

M/s Trig Security and Intelligence Pvt. Ltd. A.Y.: 2014-15 service tax claimed at Rs. 7,30,708/- on account of non-payment thereof in the relevant previous year thereby invoking section 43B of the Act.

3.

Learned counsel only pleas during the course of hearing before us is that the impugned service tax deduction component has nowhere been routed through its profit and loss account so as to be claimed as a revenue’s item allowable for deduction. He then quoted this tribunal’s co-ordinate bench decision of M/s Vansun Erectors Pvt. Ltd. vs. ITO, Ward-17(3), Hyderabad in for AY 2014-15 dated 15.02.2019, hon’ble Bombay high court’s decision in PCIT vs. Top Security Pvt. Ltd. (2018) 97 taxman.com 525 hon’ble Delhi high court decision in CIT vs. Nobel and Hewitt India Pvt. Ltd. (2008) 305 ITR 324 Calcutta high court decision in CIT vs. Associated Pigment Pvt. Ltd. (1993) 71 Taxman 244 (Cal) to this effect. There is no rebuttal from Revenue side qua the above legal position. The fact also remains that neither of the lower authority has examined the assessee’s profit & loss account to the above clinching effect. The very factual position continues before us as well since the assessee’s profit and loss account does not form part of the case records. We therefore accept the assessee’s foregoing sole grievances in principle and restore the issue back to the Assessing Officer for his necessary factual verification of the profit and loss account to this effect.

4.

This assessee’s appeal is allowed in above terms.

Order pronounced in the Court on 23.09.2020

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