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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO, HON’BLE & SHRI D.S. SUNDER SINGH, HON’BLE
IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HON’BLE ACCOUNTANT MEMBER ITA No. 282/VIZ/2014 (Asst. Year : 2010-11) ACIT, Circle-4(1), vs. M/s. Reliable Stevedores Visakhapatnam. Pvt. Ltd., D.No. 14-37-19/3, Ground Floor-C, Gokhale Road, Maharanipeta, Visakhapatnam. PAN No. AADCR 7426 B (Appellant) (Respondent)
Assessee by : Shri G.V.N. Hari – Advocate. Department By : Shri T. Satyanandam – Sr.DR Date of hearing : 08/03/2018. Date of pronouncement : /03/2018. O R D E R PER V. DURGA RAO, JUDICIAL MEMBER
This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals), Visakhapatnam, dated 10/03/2014 for the Assessment Year 2010-11. 2. Facts of the case, in brief, are that the assessee is engaged in the business of stevedoring, shipping and forwarding agency, filed its return of income by declaring total income of Rs.80,89,170/-. The return filed by the assessee was processed
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under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). Subsequently case was selected for scrutiny and assessment is completed under section 143(3) of the Act. During the course of assessment proceedings, the Assessing Officer has noted that on verification of the balance sheet at Schedule-3 under the head ‘secured loans’, it is found that the assessee has shown service tax payable at Rs. 78,94,719/- instead of showing as a current liability. However, on verification of the details of the same, it is found that the assessee has collected the service tax as part of sales, but not paid to the statutory authority. Moreover, the assessee collected the service tax but neither paid to the statutory authority nor included in the gross receipts of the assessee, therefore, same is added in the hands of the assessee. 3. On appeal before the ld. CIT(A), it was contended that the assessee has not received the entire service tax, some component is receivable. He relied on the decision of the Hon'ble Delhi High Court in the case of CIT vs. Noble Hewitt (India) (P) Ltd. [305 ITR 324 (Del.)]. The ld. CIT(A) by following the decision of the Hon'ble Delhi High Court in the above referred to case, deleted the addition made by the Assessing Officer.
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On being aggrieved, Revenue carried the matter in appeal before the Tribunal. 5. In this case, as per the Assessing Officer, the assessee has to pay the service tax of Rs. 78,94,719/-. The case of the assessee is that the entire amount of Rs. 78,94,719/- is not collected, still there is some receivable. It is not clear from the assessment order and even from the ld. CIT(A)’s order that what is the amount of service tax has been collected by the assessee. When Bench is asked, ld. counsel for the assessee is not able to answer the same and also not able to file the details, but he requested, issue may be remitted back to the Assessing Officer for fresh consideration. 6. Ld. Departmental Representative relied on the order passed by the Assessing Officer. 7. We have heard both the sides, perused the material available on record and orders of the authorities below. 8. The issue involved in this appeal is in respect of service tax collected and payable to the Government. The case of the Assessing Officer is that assessee has to collect the service tax and payable to the Government of Rs. 78,94,719/-. The case of the assessee is that he has not collected the entire amount and some of the amount is receivable and he submitted that assessee
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is following mercantile system of accounting and the service tax collected is neither debited to the profit & loss account nor claimed as deduction, therefore, no service tax has to be paid. We consider the arguments of the assessee. We need to see that what is the accounting system followed by the assessee and also to see the profit & loss account and other relevant details. No details are available before the Bench. Ld. counsel for the assessee has expressed his inability to substantiate his case before the Tribunal. Therefore, by considering the request made by the assessee’s counsel, we are of the opinion that the issue has to be remitted back to the Assessing Officer to consider afresh. In view of the above, we set aside the order passed by the ld. CIT(A) and remit the matter back to the Assessing Officer to consider the relevant details and to pass an order denovo in accordance with law. 9. In the result, appeal filed by the Revenue is allowed for statistical purposes. Order Pronounced in open Court on this 14th day of March, 2018.
Sd/- sd/- (D.S. SUNDER SINGH) (V. DURGA RAO) Accountant Member Judicial Member Dated : 14th March, 2018.
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vr/- Copy to: 1. The Assessee - M/s. Reliable Stevedores Pvt. Ltd., D.No. 14-37-19/3, Ground Floor-C, Gokhale Road, Maharanipeta, Visakhapatnam. 2. The Revenue – ACIT, Circle-4(1), Visakhapatnam. 3. The CIT-2, Visakhapatnam. 4. The CIT(A), Visakhapatnam. 5. The D.R., Visakhapatnam. 6. Guard file. By order
(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Visakhapatnam.