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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
In this appeal for Assessment Year (AY) 2013-14, the sole grievance of the assessee is disallowance of Service Tax for Rs.71.44 Lacs u/s 43B. At the time of hearing, none appeared for assessee. However, we find that similar issue has already been adjudicated by us in assessee’s own case for AY 2012-13, as under: -
Upon careful consideration of factual matrix, we find that the assessee is following exclusive method to account Service Tax liability in the Books of Accounts and therefore, the argument that the Service Tax was not routed through profit & Loss Account would not hold good. At the same time, we find that as per extant Service Tax Rules, the Service Tax liabilities arise in the hands of the assessee on receipt basis. Until the consideration is received, Service Tax is not payable. Therefore, the liability to pay Service Tax, at year-end, may not have actually arisen in the hands of the assessee. Therefore, the disallowance has to be made only to the extent the liability to pay Service Tax Liability had arisen in the hands of the assessee at year-end. The Ld. AO is directed to verify this fact and restrict the disallowance to that extent only.”
The Ld. Sr. DR submitted that similar directions may be given in this year. Considering the same, the matter stand remitted back to the file of the Ld. AO with similar direction. 2. The appeal stands allowed for statistical purposes.
Order pronounced on 04th July, 2022.