KANKANI CONSTRUCTION (P) LTD.,HOOGHLY vs. JCIT(OSD), CIRCLE - 4, KOLKATA, KOLKATA

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ITA 2023/KOL/2017Status: DisposedITAT Kolkata19 January 2018AY 2009-103 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 the addition for unpaid service tax was not sustainable as the assessee had not claimed it as an expenditure. Regarding sundry creditors, it was held that carry-forward liabilities and undisputed credit purchases do not attract Section 68.

What were the facts?

The assessee's appeal was filed with a delay, which was condoned. The appeal concerned additions made by the revenue towards unpaid service tax and unexplained sundry creditors.

What were the issues?

Whether unpaid service tax is disallowable under Section 43B when not claimed as expenditure, and whether Section 68 applies to carry-forward balances and undisputed credit purchases.

Which sections of the Income-tax Act were involved?

Section 43B,Section 68

AI-generated summary — verify with the full judgment below

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

Before: Sri J. Sudhakar Reddy, Hon’ble]

Assessment Year: 2009-10 Kankani Construction (P) Ltd…....…...………..……………………………………….…….……...Appellant C/o. S.N. Ghosh & Associates, Advocates “Seven Brothers’ Lodge” P.O. Buroshibtala P.S. Chinsurah Dist. Hooghly PIN- 712 105 [PAN : AABCK 4191 Q] J.C.I.T.(OSD) Circle-4, Kolkata………….……………………………………..………………..…. Respondent Aayakar Bhawan P-7, Chowringhee Square 8th Floor Kolkata – 700 069 Appearances by: Shri Somnath Ghosh, Advocate, appeared on behalf of the assessee. Shri Sanjoy Mukherjee, Addl. CIT, DR appearing on behalf of the Revenue. Date of concluding the hearing : December 28th, 2017 Date of pronouncing the order : January 19th, 2018

O R D E R Per J. Sudhakar Reddy :-

This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals)-2, Kolkata, (hereinafter the ‘ld. CIT (A)’), passed u/s 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 01/06/2017, for the Assessment Year 2009-10.

2.

There is delay of 8 days in filing of the appeal. On perusal of the petition filed for condonation of delay, I am convinced that the assessee was prevented by sufficient cause from filing the appeal in time. The delay is condoned and the appeal is admitted.

3.

After hearing rival contentions, I find there are two issues that arise in the appeal.

Assessment Year: 2009-10 Kankani Construction (P) Ltd 4. First is the addition of Rs.2,01,850/-, towards unpaid service tax u/s 43B of the Act, the second on account of addition of an amount of Rs.1,33,827/-, on account of unexplained sundry creditors, u/s 68 of the Act.

5.

In case of service tax, I find that the assessee has not claimed the amount as expenditure during the year. When no expenditure has been claimed, the question of disallowance u/s 43B of the Act, does not arise as held by the Hon’ble Calcutta High Court in the case of A.W. Figgis And Co. Ltd. vs Commissioner Of Income-Tax 2002 256 ITR 268 Cal. Thus, this addition is deleted.

6.

Coming to the addition of sundry creditors, I find that the first amount in dispute is liability of Rs.1,06,737/-, payable to Shri Ananta Das, which is a carry forward balance from the earlier year. As the credit did not arise during the year, no addition u/s 68 of the Act, can be made in this year. Hence the same is deleted.

6.1. The other addition is of an amount of Rs.27,090/-, being purchases on credit from M/s Calcutta Anodizing Works. Section 68 of the Act cannot be attracted when the fact of purchase is not in dispute and when the trading results have been accepted by the Assessing Officer. In the result, this addition is also deleted.

7.

In the result, appeal of the assessee is allowed.

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