M/S.TAMILNADU STATE MARKETING CORPN. LTD.,,CHENNAI vs. DCIT, CC-3(1),, CHENNAI

ITA 1179/CHNY/2024Status: DisposedITAT Chennai23 August 2024AY 2018-19Bench: Shri S.S. Viswanethra Ravi (Judicial Member), Shri Jagadish (Accountant Member)10 pages
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What did the Tribunal hold?

The Tribunal held that VAT is a tax levied by the State Government under its exclusive domain and is distinct from fees or charges. Therefore, it does not attract the provisions of Section 40(a)(iib) of the Act.

What were the facts?

The assessee debited VAT expenses in its profit and loss account. The Principal Commissioner of Income Tax (PCIT) initiated proceedings under Section 263, holding that VAT is a fee or charge covered under Section 40(a)(iib) of the Income Tax Act, 1961.

What were the issues?

Whether VAT paid by the assessee is a fee or charge disallowable under Section 40(a)(iib) or an allowable expenditure.

Which sections of the Income-tax Act were involved?

Section 40(a)(iib),Section 263,Section 37,Section 43B

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Before: Shri S.S. Viswanethra Ravi & Shri Jagadish

Hearing: 08.08.2024Pronounced: 23.08.2024

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 31.03.2024 passed by the ld. Principal Commissioner of Income Tax,Chennai-3, Chennai under section 263 of the Income Tax Act, 1961 [“Act” in short] for the assessment year 2018-19. 2. The ld. PCIT initiated proceedings u

The order continues below.

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