UDIT FINANCIAL SERVICES PVT. LTD.,KOLKATA vs. D.C.I.T.,CIRCLE-6(1), KOLKATA

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ITA 2607/KOL/2019Status: DisposedITAT Kolkata26 February 2020AY 2012-132 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the service tax was paid to the Service Tax Department by the commission agent and recovered from the assessee, it should be allowed as an expense.

What were the facts?

The assessee declared ₹10 lakh under the Income Declaration Scheme, 2016, which was originally claimed as a commission payment. The assessee also claimed service tax of ₹1,03,000 paid to the commission agent as a deduction.

What were the issues?

Whether service tax collected from the assessee and paid by the agent to the government is an allowable deduction when the underlying commission payment is disputed.

Which sections of the Income-tax Act were involved?

Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA

Before: Shri J. Sudhakar Reddy]

order

: February 26th, 2020 ORDER

Per J. Sudhakar Reddy, AM:

1.

This is an appeal filed by the assessee directed against the order of the Commissioner of Income Tax (Appeals)-2, Kolkata [‘CIT(A)’ for short] dated 03.10.2019 u/s 250 of the Income Tax Act, 1961 (‘the Act’ for short) for AY 2012-13.

2.

The assessee in this case has offered to tax an amount of ₹10 lakh under the Income Declaration Scheme, 2016. The amount of ₹10 lakh, was originally claimed as a deduction being payment of commission. This declaration was accepted by the Pr.CIT-2, Kolkata in Form no.-4 on 06.10.2017. The assessee has claimed that service tax of ₹1,03,000/- was collected from it by M/s. Silver Point Infratech Ltd. to whom the alleged commission was paid and that M/s. Silver Point Infratech Ltd. has paid the amount in question as service tax. This service tax payment was claimed as a deduction. 3. The Revenue’s contention is that when the payment of commission itself is not genuine, the payment of service tax to M/s. Silver Point Infratech Ltd. is also a bogus payment. 4. When the service tax in question has been paid to the Service Tax Department by M/s. Silver Point Infratech Ltd., and the same has been recovered from the assessee, this Assessment Years: 2012-13 Udit Financial Services Pvt. Ltd. should be allowed as an expense and no addition can be made. Hence, the same is deleted and the appeal of the assessee is allowed. 5. In the result, the appeal of the assessee is allowed. Kolkata, the 26th February, 2020.

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