AHLUWALIA ERECTORS & FABRICATORS PRIVATE LIMITED,KOTA V. DCIT/ACIT CIR-2, KOTA

ITA 197/JPR/2025

AI Insights

The case involves Ahluwalia Erectors & Fabricators Pvt. Ltd., which filed appeals against the orders of the Commissioner of Income Tax (Appeals) and the Assessing Officer regarding disallowances made under section 43B of the Income Tax Act. The disallowances pertained to GST and service tax amounts which the Assessing Officer had disallowed, claiming they were not paid within the stipulated time. The Tribunal found that the payments were indeed made within the required timeframe and directed the Assessing Officer to adjust the disallowances accordingly. The Tribunal's decision was based on the verification of payment records and the application of relevant legal provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784414 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 12-02-2025
• Other Referred Cases: CIT v. Noble & Hewitt (I) (P.) Ltd., P.K. Parikh HUF v. ITO, ACIT v. Real Image Media Technologies (P.) Ltd., CIT v. ATS Real Estate Builders (P.) Ltd., CIT v. India Carbon Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA RINES H
• Assessee Lawyers: MAHENDRA GARGIEYA
• Keywords: Set aside; Additional evidence; Reasonable cause; Business expenditure; Principle of natural justice; TDS
• Section: 154; 139; 234B; 43B; 115JB; 37(1); 11A

Judgement Text

" vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;djvihy la-@ITA Nos. 197 to 199/JP/2025 fu/kZkj.ko\"kZ@Assessment Years : 2019-20, 2021-22 & 2022-23 Ahluwalia Erectors & Fabricators Private Limited E-77 Road No. 4, P.I.P. Kota S.O Indrapura cuke Vs. DCIT/ACIT Circle-02, Kota LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.:AAHCA0089K vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Shri Mahendra Gargieya, Adv. jktLodh vksjls@Revenue by: Mrs. Anita Rinesh, JCIT lquokbZ dh rkjh[k@Date of Hearing : 23/09/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 12/11/2025 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM These three separate appeals are filed by the assessee and are arising out of the three sperate order of Commissioner of Income Tax (Appeal)-01 Surat dated 09/12/2024 & 27/12/2024 [here in after ‘CIT(A)’) ] for Assessment Years 2019-20, 2021-22 & 2022-23, which in turn arise from the order dated 18.06.2020, 28.12.2022 & 19.06.2023 respectively passed under section 143(1) of the Income Tax Act, 1961 [ for short Act ] Printed from counselvise.com 2 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. by Centralized Proceesing Centre [CPC] of Income Tax Department [ for short AO]. 2. Since the issues involved in these appeals of the same assessee are interrelated and were argued together with the consent of the parties and therefore, we considered it dispose the same with this common order. 3. First, we take up the appeal of the assessee in ITA No. 197/JP/2025 wherein the assessee has filed the modified ground vide prayer dated 09.05.2025 and the modified ground are as under; 1. The impugned order u/s 143(1) passed by ld. AO/CPC on dt. 18.06.2020 and confirmed by ld. CIT(A) u/s 250 on dt. 09.12.2024 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. The ld. AO/CPC as well as CIT(A) erred in law as well as on the facts of the case in passing the order on dt. 09.12.2024 without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law. The impugned order having been framed in gross breach of natural justice, kindly be quashed. 3. “This ground has been merged with Ground No.2.” 4. Rs.1,95,27,206/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the order passed by ld. AO/CPC in disallowing of Rs.1,95,27,206/- [Rs.1,30,43,384/-(GST) + Rs.64,83,823/- (Service Tax)] made u/s 43B of the Act. The disallowance so made by the ld. AO/CPC is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. 5. The ld. CIT(A) erred in law as well as on the facts of the case in confirming the interest charged by ld. AO/ CPC u/s 234A, 234B & 234C of the Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full. Printed from counselvise.com 3 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. 6. The appellant prays your honour to add, amend or alter any of the grounds of the appeal on or before the date of hearing. 4. At the outset of hearing, the Bench observed that the registry mentioned that the appeal is delayed by 866 days. But when the facts confronted to the assessee we note that the date of order of the ld. CIT(A) is 09.12.2024 having considered it served on the same day and the appeal was filed on 12.02.2025 and that days excluded it was filed in 64 days. In support of the contention ld. AR of the assessee submitted the appeal was signed on 24.12.2024 but due financial constraint the fees were deposited on 11.02.2025 and thereby the same was filed on 12.02.2025. These facts were not disputed by the ld. DR. Based on these aspects of the matter we considered the delay of 4 days in filling the present appeal as the assessee has explained the reasonable cause. 5. Briefly, the fact as culled out from the records is that in this case, the appellant filed its ITR declaring total income at Rs. 81,73,179/- on 30.10.2019. The ITR was processed by the AO CPC on 18.06.2020 assessing total income at Rs. 2,77,00,386/-. The AO CPC disallowed the expenditure indicated in the Audit Report but not taken into account in computing total income in the return filed. Accordingly, disallowance of Rs. 1,95,27,206/- was made with following remarks:- Printed from counselvise.com 4 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. \"In Schedule BP, SI.No. 18. Any Amounts debited to the profit and loss account, to the extent disallowable under section 43B is not consistent with amount shown in Sl. No.11.h. Total amount disallowable under section 438(total of 11a to 11g) in schedule Ol.\" The appellant aggrieved with the disallowance made by the AO CPC, filed appeal which was adjudicated on 30.07.2022 with the following remarks of CIT(A), NFAC, New Delhi - “5.3 Ground No 2: Disallowance under Section 43B of the Act: The appellant has claimed that an amount of Rs. Rs 1,72,59,150/- was GST due as on 31.03.2019, out of which Rs 1,30,43,384/- was deposited before filing of the Income Tax Return. However, CPC has allowed the full amount under section 43B of the Act. The Assessing Officer is directed to verify the claim and restrict the disallowance under section 43B to only the amount remaining unpaid till the filing of return by the appellant.” Thereafter, the jurisdictional AO i.e, DCIT, Circle-Kota passed an order on 20.09.2022 giving effect of the Appeal Order stating as under- The assessee has filed ITR for the AY 2019-20 declaring total income of Rs. 81,73,180/-on 30.10.2019, The case of the assessee has been processed u/s 143(1) of the IT Act at total income of Rs. 2,77,00,390/- disallowing the GST of Rs. 1,30,43,384/- and service tax of Rs. 64,83,822/- as per provisions of section 43B of the IT Act. The assessee has filed appeal against the above order before the CIT(A), NFAC. The Ld. CIT(A), NFAC vide his order dated 30.07.2022 directed the AO to verify the claim and restrict the disallowance under section 438 to only the amount remaining unpaid till the filling of return by the appellant. In compliance to the direction of the CIT(A) (NFAC), opportunities were given to the assessee vide this office letter dated 12.09.2022 & 16.09.2022 but no compliance has been made by the assessee within the time period allowed. Therefore, the effect to the CIT(A)'s order is being given on the income as determined u/s 143(1) by CPC of Rs.2,77,00,390/-. 6. Aggrieved from that order giving effect to the order of the ld. CIT(A) the assessee again filed an appeal before the ld. CIT(A) as the appeal Printed from counselvise.com 5 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. effect order was not correctly passed. Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: 6. Decision: 6.1 The main ground of appeal raised by the appellant that the CPC has erred in making an disallowance of Rs. 1,95,27,206/- under section 43B of the Act. On perusal of the Form 3CA in column no. 26(i)(B)(b) wherein it is mentioned that amount of Rs. 1,30,43,384/- and Rs. 64,83,822/- were not paid by the appellant for GST & Service Tax respectively. The Ld. CIT(A) while passing order dated 30.07.2022 adjudicated the case as under:- 5.3 Ground No 2: Disallowance under Section 43B of the Act: The appellant has claimed that an amount of Rs. Rs 1,72,59,150/- was GST due as on 31.03.2019, out of which Rs 1,30,43,384/- was deposited before filing of the Income Tax Return. However, CPC has allowed the full amount under section 43B of the Act. The Assessing Officer is directed to verify the claim and restrict the disallowance under section 43B to only the amount remaining unpaid till the filing of return by the appellant. During the present appellate proceedings also, the appellant was required to submit the proof/evidence of payment of GST and service tax challan total amounting to Rs. 1,95,27,206/-, however the appellant failed to submit the challan. The appellant had also not submitted the challan before the judicial AO that was required to be verified while giving effect to the appeal order dated 20.09.2022. 6.2 On careful consideration of the facts and circumstances of the case, it is very clear that the appellant was only required to submit challan of the payment of GST and service tax before the jurisdictional AO and subsequently during the appellate proceedings. However, the appellant in spite of being given ample opportunities has not submitted proof of payment of Challan. It is therefore, presumed that the appellant has not paid the challan and deliberately wants to delay the appellate proceedings. In view of the above, that the AO CPC correctly made disallowance of Rs. 1,95,27,206/- and the jurisdictional AO made no mistake in determining the total income of the appellant at Rs. 2,77,00,390/-. Grounds raised regarding charging of interest under section 234A/B/C are of consequential in nature, hence not adjudicated. Accordingly, the grounds of appeal raised hereby are disallowed with unwavering resolve. 7. In the result, the appeals are dismissed. Printed from counselvise.com 6 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. 7. Feeling dissatisfied with the finding so recorded in the order of the ld. CIT(A), the assessee has preferred the present appeal before this tribunal on the grounds as reproduced herein above. In support of the various grounds so raised by the assessee, ld. AR of the assessee, has filed the following written submissions: Brief General Facts: The Assessee is engaged in business of Erection, Fabrication, Commissioning, Repairing Job Work of/towards Boilers for power plants. The appellant filed its ITR declaring total income at Rs. 81,73,179/- on 30.10.2019. The ITR was processed by the AO CPC u/s143(1) on 18.06.2020 assessing total income at Rs. 2,77,00,386/-. The AO CPC disallowed the expenditure indicated in the Audit Report but not taken into account in computing total income in the return. Accordingly, disallowance of Rs. 1,95,27,206/- was made with following remarks: - “In Schedule BP, Sl.No.18. Any Amounts debited to the profit and loss account, to the extent disallowable under section 43B is not consistent with amount shown in Sl.No.11. h. Total amount disallowable under section 43B (total of 11a to 11g) in schedule OI.” The appellant aggrieved with the disallowance made by the AO CPC, filed appeal which was decided on 30.07.2022 with the following remarks by the CIT(A), NFAC, New Delhi: - “5.3 Ground No 2: Disallowance under Section 43B of the Act: The appellant has claimed that an amount of Rs. Rs 1,72,59,150/- was GST due as on 31.03.2019, out of which Rs 1,30,43,384/- was deposited before filing of the Income Tax Return. However, CPC has allowed the full amount under section 43B of the Act. The Assessing Officer is directed to verify the claim and restrict the disallowance under section 43B to only the amount remaining unpaid till the filing of return by the appellant.” Thereafter, the jurisdictional AO i.e., DCIT, Circle-Kota passed the impugned order on 20.09.2022 giving effect of the Appeal Order stating as under:- “The assessee has filed ITR for the AY 2019-20 declaring total income of Rs. 81,73,180/- on 30.10.2019. The case of the assessee has been processed u/s 143(1) of the IT Act at total income of Rs. 2,77,00,390/- disallowing the GST of Rs. 1,30,43,384/- and service tax of Rs. 64,83,822/- as per provisions of section 43B of the IT Act. The assessee has filed appeal against the above order before the CIT(A), NFAC. The Ld. Printed from counselvise.com 7 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. CIT(A), NFAC vide his order dated 30.07.2022 directed the AO to verify the claim and restrict the disallowance under section 43B to only the amount remaining unpaid till the filling of return by the appellant. In compliance to the direction of the CIT(A) (NFAC), opportunities were given to the assessee vide this office letter dated 12.09.2022 & 16.09.2022 but no compliance has been made by the assessee within the time period allowed. Therefore, the effect to the CIT(A)’s order is being given on the income as determined u/s 143(1) by CPC of Rs.2,77,00,390/-.” Thus, the AO repeated the addition, which was confirmed by the CIT(A), as under: “6.1 The main ground of appeal raised by the appellant that the CPC has erred in making an disallowance of Rs.1,95,27,206/- under section 43B of the Act. On perusal of the Form 3CA in column no. 26(i)(B)(b) wherein it is mentioned that amount of Rs. 1,30,43,384/- and Rs. 64,83,822/- were not paid by the appellant for GST & Service Tax respectively. The Ld. CIT(A) while passing order dated 30.07.2022 adjudicated the case as under: - 5.3 Ground No 2: Disallowance under Section 43B of the Act: The appellant has claimed that an amount of Rs. Rs 1,72,59,150/- was GST due as on 31.03.2019, out of which Rs 1,30,43,384/- was deposited before filing of the Income Tax Return. However, CPC has allowed the full amount under section 43B of the Act. The Assessing Officer is directed to verify the claim and restrict the disallowance under section 43B to only the amount remaining unpaid till the filing of return by the appellant. During the present appellate proceedings also, the appellant was required to submit the proof/evidence of payment of GST and service tax challan total amounting to Rs. 1,95,27,206/-, however the appellant failed to submit the challan. The appellant had also not submitted the challan before the judicial AO that was required to be verified while giving effect to the appeal order dated 20.09.2022. 6.2 On careful consideration of the facts and circumstances of the case, it is very clear that the appellant was only required to submit challan of the payment of GST and service tax before the jurisdictional AO and subsequently during the appellate proceedings. However, the appellant in spite of being given ample opportunities has not submitted proof of payment of Challan. It is therefore, presumed that the appellant has not paid the challan and deliberately wants to delay the appellate proceedings. In view of the above, that the AO CPC correctly made disallowance of Rs. 1,95,27,206/- and the jurisdictional AO made no mistake in determining the total income of the appellant at Rs. 2,77,00,390/-. Grounds raised regarding charging of interest under section 234A/B/C are of consequential in nature, hence not adjudicated. Accordingly, the grounds of appeal raised hereby are disallowed with unwavering resolve. 7. In the result, the appeals are dismissed.” Printed from counselvise.com 8 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. Hence this appeal. GOA 1: Is a general ground of appeal and make be considered while deciding the other grounds of appeal. GOA 2 & 3: No adequate opportunity CPC and CIT(A) The ld. AO/CPC erred in law as well as on the facts of the case in passing the order on dt. 20.09.2022 without affording adequate and reasonable opportunity and even without complying with the mandatory statutory requirement of law. The impugned order having been framed in gross breach of natural justice, kindly be quashed. It is apparent from the record that is the impugned appeal effect order dt. 20.09.2022 (PB 44-45) pursuant to the order of the CIT(A) passed on 30.07.2022 i.e. in a short span of less than two months, the AO/CPC passed the appeal effect order on 20.09.2022. Though it is alleged that various opportunities were given however the alleged letters dt. 12.09.2022 and 16.09.2022 were not properly served upon the appellant/ its AR and otherwise also a very short time was given. Similar is the position with the CIT(A)/NFAC where, the appellate order was passed on 09.12.2024 and in Pr.6.2 the CIT(A) alleged that despite providing the ample opportunities the appellant did not furnish proof of challan etc. However, there is no details of the alleged opportunities so provided. GOA 4: Disallowance of Service Tax Rs.64,83,822/- and GST Rs.1,30,43,384/- u/s 43B: (CIT(A) Pg. 5, Pr. 6) Facts: As stated above. Submissions: 1. No exp. claimed - Sec. 43B not applicable: 1.1.1 At the outset, the provision of Sec. 43B cannot be made applicable on the facts of the present case (w.r.t. service tax payable Rs.64,83,823/-) in as much as the Assessee used to collect/credit the amount of the service tax receivable from the customer which was credited to a separate account is namely “Service Tax” and thereafter the balances were transferred to “Service Tax Payable Account” for the different years. In other words, the amount of service tax collected/credited was directly taken to the service tax payable account in the Balance Sheet (PB-5), however, there was no occasion for the Assessee nor the Assessee ever taken such item to the Profit & Loss Account (PB-6-10).Similar is Printed from counselvise.com 9 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. the position w.r.t. GST payable Rs.1,30,43,384/- as the same was never dr. and claimed in the P & L account (PB-6-10). In other words, the Assessee made no claim at all in the P&L Account of the service tax and GST payable during the year, if any, during the year. Once admittedly no claim was made, there can’t be any question of allowance or disallowance and consequently Sec.43B could not have been invoked. 1.1.2 In any case, the crucial fact that the tax audit report as also the audited Balance Sheet and P & L account along with all its schedules and annexures were uploaded on the site of the income tax department portal (ITD) while filing the return of income, which were available to the AO and CPC as also to the CIT(A). The fact that no amount of the GST or Service Tax, was debited and claimed in the P & L account is self-evident and strangely none of the authorities have made any adverse remark on that part. 1.2. Interestingly, even in the past/other years, the AO himself had accepted this contention in principle. The audited P&L Account and Balance Sheet were admittedly available (PB 5-10) before both the lower authorities and it is evidently clear from a perusal of the P&L account that no claim on account of service tax was ever made by the Assessee, neither in this year nor in the past. In fact, the Assessee was receiving the money as a trustee for and on behalf of Central Government on one hand and making the payment/was supposed to make the payment to the Central Government. But simply because the Assessee could not/did not make any payment of service tax which remained payable at the end of the year could not be disallowed in view of the substantive and admitted fact that in the P&L account no claim as such was made by the Assessee. The provisions of Sec.43B itself presupposes that some claim is made by the Assessee and the same is otherwise allowed under the provisions of the Act then only, a disallowance can be made, if so required thereunder. 1.3 Notably the CIT(A) vide his order dt. 19.10.2022 (PB 46-49) for AY 2017-18, in Pr.5 had already held that if some expenditure was not debited to P & L account, Sec. 43B could not be invoked w.r.t. such expenditure, in the following words: “5. Findings & determination: 5.1.1 Ground No. 1 :- Disallowance of Govt dues of Rs. 80,20,090/- u/s 43B of the Act :- During the scrutiny assessment the AO called for details of Government dues outstanding as on 31.03.2017 and evidence of payment of the same. The Printed from counselvise.com 10 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. appellant informed that Govt. dues of Rs. 80,20,090/- included Service Tax payable for F.Y. 15-16 at Rs. 17,20,570/- and Service Tax payable for F.Y. 16- 17 of Rs. 62,99,520/-. In the absence of relevant evidence, the AO held that the same was unpaid within the stipulated time period as per provision of section 43B of the Act and Hence, he disallowed this amount. 5.1.2 The appellant has claimed that the delay in deposit of Service Tax was due to non-receipt of payment from parties. Further, the appellant has claimed that it has applied under Service Tax Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS) in respect of the amount of Service Tax due of previous years Rs. 76,70,090/-. 5.1.3 I have considered the reasoning of the assessing officer and the explanation offered by the appellant. As per the provisions of section 43B, Payments in respect of taxes and Government dues can be claimed as expenditure only on actual payment on or before the due date of return. This section has been enacted to enforce. This section has been enacted to enforce that taxes and Government dues are actually paid when the same is claimed as expenditure, including in respect of assessee who maintain accounts on mercantile basis. The AO has disallowed the amount by noting that Government dues have remained unpaid hence the same was disallowed. On the other hand the appellant has applied for Dispute Resolution Scheme under Sabka Vishwas Scheme of CBIC. In these circumstance, what is pertinent is how much expenditure has been debited in the account of the appellant. If it has debited and claimed Service Tax payment as expenditure, then the same would be allowed only if paid before the due date of filing of return. However, if the same has not been claimed in the P&L account/return, then no such disallowance is required to be made.---” Though it was w.r.t. service tax yet applies for GST as well. The revenue not having challenged such finding, has attained finality. And will work as estoppel against the revenue. 1.4 Supporting Case laws: 1.4.1 CIT v. Noble & Hewitt (I) (P.) Ltd. (2008) 305 ITR 324 (Delhi HC) (DC 1-2) held that, “In our opinion since the assessee did not debit the amount to the Profit & Loss Account as an expenditure nor did the assessee claim any deduction in respect of the amount and considering that the assessee is following the mercantile system of accounting, the question of disallowing the deduction not claimed would not arise. Learned counsel for Printed from counselvise.com 11 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. the revenue submits that the assessee has sought to evade tax under the mercantile system of accounting. We are of the view that it is not for the revenue authorities to tell the assessee how to maintain its accounts”. 1.4.2 P.K. Parikh HUF v. ITO [2024] 161 taxmann.com 22 (Ahmedabad - Trib.) (DC 3-6), It was held as under: “We have heard both the parties and perused all the relevant materials available on record. The assessee did not debit the amount to the profit and loss account as an expenditure not the assessee claimed any deduction in respect of amount. In fact, the assessee has treated the same as current liabilities and provisions and also given the description under Schedule 7 regarding duties and taxes. Thus, the contention of the ld. A.R. that the provisions of section 43B is not applicable to the assessee as the assessee has paid the GST amount before filing of the return of income appears to be correct. The decision of Hon'ble Apex Court in case of Chowringhee Sales Bureau (P.) Ltd.. (supra) will not be applicable as in the present case, assessee had given the details of the current liabilities and not estimated the same and was not debited the same as an expenditure in profit and loss account and not claimed any deduction to that effect. But since the assessee had paid the said amount prior to filing of the return of income, the decision of Hon'ble Delhi High Court will be applicable in case of assessee as the ratio laid down by the Noble & Hawitt (I)(P.) Ltd.. (supra) will be squarely applicable in the present case. Thus, the appeal of the assessee is allowed.”. 1.4.3 ACIT v. Real Image Media Technologies (P.) Ltd. (2008) 114 ITD 573 ITAT Chennai, 2008 (DC 7-13) held that, “16. If there is no liability to make the payment to the credit of Central Government because of non-receipt of payments from the receiver of the services, then it cannot be said that such service tax has become payable in terms of clause (a) of section 43B because that clause specifically mentions \"sum payable by the assessee. 17. In view of the above observations, we are of the view that since service tax was not payable by the assessee, the rigour of section 43B could not have been applied to the case of the assessee.” 1.4.4 CIT v. ATS Real Estate Builders (P.) Ltd. [2025] 172 taxmann.com 611 (Delhi - Trib.) (DC 14-16) held that, “6. The ground no. 2 to 4 of appeal are in respect of single issue i.e. disallowance made under provisions of section 43B of the Act in respect of Goods & Service Tax payable. The short contention of the assessee is that GST amounting to Rs.3,55,01,693/- has not been routed through Profit and Loss account, therefore, no disallowance can be made in respect of aforesaid amount u/s. 43B of the Act. Similar submission was made by the assessee before the CIT(A). We find that the fact the amount disallowed u/s. 43B of the Act has not been routed through P&L account is not rebutted by the Revenue. No contrary material has been placed before us, by the Revenue to show that the assessee Printed from counselvise.com 12 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. has claimed deduction in respect of GSTRs.3,55,01,693/-. The contention of the assessee that aforesaid amount has been reflected as GST payable under the head current liabilities is uncontroverted. The Hon'ble Delhi High Court in the case of CIT v. Noble and Hewitt (I) P. Ltd. (supra) held that where the assessee has neither claimed deduction on account of Service Tax nor has debited the amount to Profit and Loss account, the provisions of section 43B of the Act do not get attracted. Hence, question of disallowance of deduction not claimed does not arise. 7. In light of facts of the case and the decision rendered by Hon'ble Jurisdictional High Court, we find merit in submissions of the assessee. Hence disallowance made by the AO u/s. 43B of the Act is directed to be deleted. The findings of the CIT(A) in respect of this issue are reversed and ground no. 2 to 4 of appeal are allowed.” 1.4.5 ACIT v. India Carbon Ltd. [1993] 200 ITR 759 (Gauhati) held that, “Section 43B declares that taxes and duties shall not be allowed as deduction from the income unless they are actually paid. It removes the doubt as to the meaning of the word \"paid\" according to the method of accounting regularly employed by an assessee, insofar as deduction claimed in respect of any sum payable by way of tax or duty. The declaration does not, however, place any restriction on the business activities and on the system of accounting. Therefore, section 43B shall only be attracted when the assessee claims deduction for any sum payable by way of tax or duty under any law for the time being in force, and, as such, where no such deduction is claimed nor charge made to the profit or loss account, there was no question of disallowing the amount taken to the balance-sheet on the liabilities side as well as of 'add back'. In the instant case, the question was whether section 43B would apply and not the question whether or not the sales tax collected formed part of the business or trading receipts. What would be the effect of showing such sum as payable by way of tax on the liabilities side in the balance-sheet without actually paying the same was a different question. The petition, was, therefore allowed and the addition was quashed. Note : The case was decided in favour of petitioner/assessee.” 1.4.6 CIT v. India Carbon Ltd. [2003] 262 ITR 327 (Gauhati) (DC 17-18) held that, “Whether the Central sales tax and the State sales tax collected would form part of the assessee's income being the trading receipt was not the question considered by any of the authorities. The question which was considered by the Court below was whether section 43B was attracted in the facts of the instant case and thus it was clear that neither of the authorities had considered the case whether the tax collected was an income of the assessee being the trading receipt. Printed from counselvise.com 13 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. On the facts found, section 43B was not attracted at all when the assessee had not claimed any deduction of the amounts collected by it as the Central sales tax and the State sales tax.” 2. Subjected amount of Service Tax related to earlier years hence beyond the scope of section 43B : 2.1 The impugned addition of Rs.1,95,27,207/-, consisted of two amounts (i) Rs.1,30,43,384/- GST payable and (ii) Rs.64,83,823/- service tax payable as on 31.03.2019. Further the amounts of Service Tax Payable Rs.36,70,091/-was related to AY 2017-18 and similarly Rs.28,13,732/- related to AY 2018-19, both of which were part of outstanding amount of Rs.64,83,823/-. However, there was no amount of outstanding service tax as payable relating to AY 2019-20. For better representation kindly refer at a glance chart (PB-17). Thus, the total amount of Rs.64,83,823/- relating to service tax payable could not have been disallowed in this year u/s 43B as the same related to preceding years and no liability arose this year. 2.2 Pertinently, in the set aside assessment order passed u/s 143(3)/250 dt. 07.12.2022 (PB 50-52) for AY 2017-18 (pursuant to the appellate order dt. 19.10.2022 (PB 46-49), the AO himself did not repeat the disallowance initially made of Rs.17,20,517/-(which was initially included in the total disallowance made u/s 43B of Rs. 80,20,090/-) for the reason that the same related to AY 2016-17 and not to this year. 3.1 Disallowance of GST u/s 43B already made in AY 2017-18: It is further submitted that the AO/CPC has considered such amounts also for which disallowances were already made in the past in AY 2017-18, yet the same has been once again repeated here. The GST disallowance of Rs.64,83,823/- consisted of Rs.36,70,091/- and Rs. 26,29,430/-. Further Rs.36,70,091/- was disallowed this year out of Rs.62,99,520/- after reducing the payment made before the due date of Rs.26,29,430/- the balance was considered for disallowance. The amounts of Rs.17,20,570/- and the aforesaid Rs.62,99,520/- totalling to Rs.80,20,090/- related to AY 2016-17 and 2017-18 respectively were already subject matter of disallowance in AY 2017-18 (as stated above). Kindly refer appellate order dt. 19.10.2022 for AY 2017-18 (PB 46-49), wherein para.5 this disallowance of Rs.80,20,090/- made u/s 43B is discussed and finally it was restored to the AO. Pursuant to the direction, the AO passed the appeal effect order dated 07.12.2022 (PB 50-52) wherein, except Rs.17,20,570/- the AO again Printed from counselvise.com 14 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. disallowed the aforesaid Rs.62,99,520/-, which is presently under the challenge before the CIT(A)/NFAC in the II round. 3.2 As regards the disallowance of GST payable of Rs. 1.30 Cr.: Alternatively, and without prejudice to our other legal and factual contentions raised, it is further submitted that as a matter of fact the total amount outstanding as on 31.03.2019 was Rs.1,72,47,207/- out of which Rs. 1,30,43,654/- was already deposited on or before the due date u/s 139 i.e. 30.10.2019 as evident from the copy of Ledger Account (PB 18) and the GST challans (PB 20-30) where the deposits made up to 29.10.2019 totals to Rs.1.30 Cr. In the first round, even the CIT(A) noted this fact. Therefore, it is only the balance of Rs. 42,03,553/- which could have been considered u/s 43B. The Tax Auditor though noted these facts, appears to have wrongly mentioned the figures in column no. 26(i)(B)(a) (PB 13) where the amount paid before the due date has been shown at Rs. 41,26,853/- as against the correct amount of Rs. 1,30,43,384/- and accordingly in column no. 26(i)(B)(b) similar mistake has been committed and thus figures have been wrongly mentioned at both the places. (Kindly refer at a glance chart at PB 17). These facts or circumstances shows that Sec.43B was wrongly invoked hence the entire disallowance deserves to be deleted. 8. Further, the ld. AR appearing on behalf of the assessee has also placed their written submission – II dated 13.05.2025 which is extracted in below; In continuation and addition to our earlier submission dt. 15.04.2025 it is further submitted as under: GOA 4: Disallowance of Service Tax Rs.64,83,822/- and GST Rs.1,30,43,384/- u/s 43B: (CIT(A) Pg. 5, Pr. 6). 1.5. Issue Debatable: In case there is a contrary view, the issue becomes debatable and as per settled law a view favorable to the Assessee should be adopted as held in Vegetable products. 82 ITR 192 (SC) Printed from counselvise.com 15 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. 4. Allowable on actual payment: Alternatively, and without prejudice to our other legal and factual contentions raised, it is submitted that a deduction u/s 43B is otherwise allowable on actual payment basis. In this case, Rs. 42,03,553/- (as stated in the chart PB-17 and the ledger account GST payable PB-19), was actually paid in A.Y 20-21, which fact is evident from the entries in the ledger a/c that the payment to that extent was made in the next year A.Y 20-21. Hence, it is requested that the AO kindly be directed to allow deduction to this extent in A.Y 20-21. 3.2 As regards the disallowance of GST payable of Rs. 1.30 Cr.: 3.3 In support of the contention, we are also submitting herewith with this WS, a certificate from the Ld. Tax Auditors M/s Milind Vijayvargiya & Associates confirming the clerical mistake occurred at their place and stating the correct position of facts as stated by us in chart (PB-17) and Pr. 3.2 of our earlier WS. 9. To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions: Sr. No. Particulars Pg. No. 1. Copy of Return of Income filed u/s 139 dt. 30.10.2019 along with Computation of Total Income. 1-4 2. Copy of Audited Balance Sheet and Profit and Loss Statement for the Year ending 31.03.2019 (With relevant Annexures) 5-10 3. Copy of Tax Audit Report dt. 03.10.2019 along with Form 3CD for AY 2019-20. 11-13 4. Copy of Application u/s 154 w.r.t Intimation u/s 143(1) dt. 04.10.2024. 14-16 5. Copy of at a glance chart showing working of disallowable Amount u/s 43B for AY 2019-20 17 6. Copy of Ledger Account of current liabilities in the books of the assessee for AY 2019-20. 18 7. Copy of Ledger Account of GST in the books of assessee for previous years 19 8. Copies of the Challan towards GST Payments. 20-30 Printed from counselvise.com 16 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. 9. Copies of Ledger Accounts of Service Tax payables in the books of assessee for previous years 31-35 10. Copies of e-Receipt for Central Service Tax Payments for AY 2019- 20. 36-43 11. Copy of Order dt. 20.09.2022 giving effect to the CIT(A) order dt. 30.07.2022 u/s 143/250. 44-45 12. Copy of Appellate Order u/s 250 by the CIT(A)/NFAC on dt. 19.10.2022 in AY 2017-18 and AO’s order giving effect on dt. 07.12.2022 46-52 13. Copy of relevant extract Balance Sheet for the year ending 31.03.2019 (A.Y.2019-20) 53 14. Copy of ledger account of current liabilities showing service tax payable for the year ending 31.03.2018 AY 2018-19. 54 15. Copy of relevant extract Balance Sheet for the year ending 31.03.2017 (A.Y.2017-18) 55-56 16. Copy of ledger account of current liabilities showing service tax payable for the year ending 31.03.2017 AY 2017-18. 57 10. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the lower authority has not appreciated that the fact the what is the amount debited in the year under consideration can be disallowed and not the amount outstanding but not debited in the profit and loss being the unpaid balance of the earlier year. Not only that the lower authority has not appreciated to allow the deduction once the assessee has paid the outstanding amount in the year of payment made. Printed from counselvise.com 17 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. 11. Per contra, ld. DR relied upon the orders of the lower authority and placed on record similar contention as raised in the written submission. She also objected to the modified ground taken by the assessee. The written submission filed by the ld. DR reads as follows: With reference to the subject matter of the present appeal and in response to the grounds raised by the appellant, the Revenue respectfully submits the following written objections and factual clarifications. 1. Grounds Raised by the Appellant Are Either Misplaced or Infructuous A perusal of the appellant's grounds of appeal reveals the following issues: Ground No. 1 & 2: Challenge the appellate order as lacking jurisdiction and being passed in violation of natural justice. However, the Ld. CIT(A) has clearly recorded in paras 6.1 and 6.2 of the impugned order that multiple opportunities were provided both by the jurisdictional AO during effect-giving proceedings, and again at the appellate stage. The appellant failed to produce the GST & Service Tax challans despite such opportunities. Even when in the first round of appeal Ld. CIT(A) has set-a-side the issue to the file of AO, and that also remained ex- parte. Ground No. 3: Challenges the original CPC order dated 20.09.2022. However, the current appeal lies only against the CIT(A)'s order dated 09.12.2024, and not against CPC's action. Thus, this ground is misdirected and not maintainable. Ground No. 4: Challenges the disallowance of ₹1,95,27,206/- under section 43B However, the disallowance has been made only because the assessee failed to produce the proof of payment of GST and Service Tax. Even during appellate proceedings, no such challans were furnished The Ld. CIT(A) has rightly concluded that in absence of evidence, the disallowance under section 43B is justified 3. Paper Book Contains Pages Not Submitted Before Lower Authorities Printed from counselvise.com 18 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. It is further submitted that the assessee has filed a paper book with index pages 20 to 43, which contain documents that were never submitted before either the jurisdictional AO or the Ld. CIT(A) The assessee, while filing the paper book, has not made any declaration under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963, nor filed an application seeking admission of additional evidence. In light of this, the assessee may kindly be directed to File an affidavit affirming whether the documents at page numbers 20 to 43 of the paper book were submitted before any lower authority, If not, then to explain the reason for non-submission and file a formal application under Rule 29 if admission is sought at this stage. 4. Disallowance Under Section 43B is Fully Justified The disallowance of ₹1,95,27,206/-is based on specific reporting in Form 3CA- Clause 26(i)(B)(b), where it was mentioned that. Rs.1,30,43,384/- towards GST, and Rs. 64,83,822/- towards Service Tax remained unpaid as on 31.03.2019. Despite directions from CIT(A) and multiple opportunities at various stages, the assessee has failed to produce even basic documentary evidence (ie, challans) to substantiate that these amounts were paid within the permissible time. Therefore, the disallowance under section 43B is not only legally sustainable but factually warranted. 5. Prayer In view of the above facts and legal position, it is respectfully prayed that this Hon'ble Tribunal may be pleased to 1. Reject grounds 1 to 3 as either infructuous or not arising from the impugned order of the Ld. CIT(A), Printed from counselvise.com 19 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. 2 Uphold the disallowance of 21,95,27,206/- under section 43B in the absence of any proof of payment, 3. Direct the assessee to file an affidavit confirming whether the documents at pages 20 to 43 of the paper book were ever submitted before lower authorities, 4. Reject admission of any additional evidence not forming part of lower proceedings unless a proper application under Rule 29 is filed and allowed, 5. Dismiss the appeal with appropriate cost, as the same appears to have been filed to delay finality despite clear non-compliance on part of the appellant The Revenue reserves the right to submit further reply if required during the course of hearing.” 12. In support of the contentions raised by the assessee ld. DR filed the rejoinder on 30.09.2025 which reads as under: 1. Most respectfully it is humbly submitted that assessee has requested various grounds of Appeal and in support of that assessee has submitted Paper Book and Written submissions. The Hon’ble Bench, ITAT Jaipur has been kind enough to allow an opportunity to the Revenue to file a written Rejoinder on the ground/argument taken by the assessee. The Ground of Appeal in all the years are almost similar, hence this is a common rejoinder submitted before the Hon’ble Bench ITAT, Jaipur with request to consider the same in the decision of the Double Bench. 2. ITA No. 197/JPR/2025(AY 2019-20) Ground No. 1 (modified by the assessee): The Revenue respectfully submits that assessee has raised the ground that order u/s 143(1) passed by NAFAC and confirmed by CIT(A) was bad in law and out of jurisdiction along with other reason kindly be quashed. In the second ground of Appeal assessee has challenged that reasonable opportunity was not afforded to the assessee and without complying with the mandatory statutory requirement of the law, the order is gross beach of Natural Justice. The third ground of Appeal, the assessee has taken as merged with ground No. 2. In the ground No. 4 the assessee has taken the plead that disallowance made by AO CPC and confirmed by CIT(A) is totally contrary to the provisions of the law and facts and same kindly be deleted in full. The Revenue respectfully submits as under: Printed from counselvise.com 20 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. The time line is this case is summarized as under S. No. Date Details Remarks 1. 30/10/ 2019 Assessee filed ITR Assessee mentioned in the Audit Report, 2 18/06/ 2020 Return Processed AO/CPC disallowed the expenditure indicated in the Audit Report. But not taken into account in computing the total income by the Assessee. 3 30/07/ 2022 Ld. CIT(A) directed the concerned officer to verify the claim u/s 43B Restored back to the AO 4. 20/09/ 2022 DCIT passed order with remark that opportunity was provided to the assessee on 12/09/2022 and 16/09/2022 but no compliance was made by the Assessee. Assessee remained non cooperative and no reason given for nonappearance. 5. 18/06/ 2020 Assessee filed appeal against the order of DCIT taking the ground that reasonable opportunity has not been provided to the Assessee. There was a delay of 30 days in filing of Appeal but no reason has been given for that. The Ld. CIT(A) however given findings that in the earlier Appeal has been provided almost more than 12 opportunities (Para No. 4.3 Page No. 4 of Ld. CIT(A) Order dated 09/12/2024) and though the Assessee’s attitude was deliberately keeping the Appeal pending and deserved to be dismissed however, the Appeal was adjudicated on merit also. 6. 09/12/ 2024 The Ld. CIT(A) held that assessee need to submit only proof of payment of GST and service tax challan amounting to Rs 1,95,27,206/- but the challan were not filed Ld. CIT(A) dismissed the Appeal as assessee has not submitted any evidence regarding this claim. Printed from counselvise.com 21 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. before any authority 7. 24/12/ 2024 Assessee filed appeal before the Hon’ble ITAT and taken various argument as mentioned in supra point No. 2 - The above timeline reflects the attitude of the assessee on a very simple issue of providing GST and service tax challan. The assessee submitted challan before the Hon’ble Bench, ITAT, Jaipur vide Paper Book filed on 11/04/2025. Before this date, challan were never filed before the lower authorities. As per the paper book the deposit date of GST challan receipt has been mentioned as in the year on 2019 on various dates starting from 13/05/2019 to 03/02/2020. The Hon’ble Bench, ITAT, Jaipur is requested to take this fact on record and reject the ground of the Appeal that opportunity was not provided before the income tax authorities. It is also requested that the assessee has filed modified ground of appeal on 09/05/2025 and has not mentioned anywhere that GST challan submitted by the assessee before the Hon’ble Bench were filed before the lower authority. There is misrepresentation of facts by the assessee and the Hon’ble Bench, ITAT, Jaipur is requested to consider the written submission of the Revenue and dismiss the Appeal. 3. ITA No. 198/JPR/2025 (AY 2021-22) The time line in this appeal is as under S. No. Date Details Remarks 1. 15/03/ 2022 Assessee filed ITR Assessee mentioned in the Audit Report that GST was not paid before the due date. 2. 28/12/ 2022 AO/CPC disallowed the deduction u/s 43B AO/CPC disallowed the expenditure indicated in the Audit Report. But not taken into account in computing the total income by the Assessee. 3. 15/07/ 2024 Delay of 500 days without submitting any reason. The Ld. CIT(A) partly allowed Appeal of the Assessee on verification of short credit of TDS. The disallowance of Rs 1,71,69,480/- has been confirmed as no evidence has been submitted. Printed from counselvise.com 22 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. 4. 03/02/ 2025 Assessee filed Appeal before the Hon’ble ITAT, Jaipur Assessee has raised the ground of jurisdiction, violation of principal of natural justice and not giving credit of prepaid taxes and disallowance made u/s 43B. The Revenue in light of above, submits that assessee filed modified grounds of Appeal on 09/05/2015. On 13/05/2015 a written submission has been filed by the office of the DR, it is requested that the same may be considered. After the written submission of the Revenue the AR has taken new ground of Appeals being legal in nature before the Hon’ble Bench before 04/08/2025 and for ready reference of the Hon’ble Bench the additional ground of the assessee are reproduced as under “6. Rs. 1,68,19,314/-: The outstanding amount of GST was not paid by the customers and thus having been lost such amount deserves to be allowed as a valid business expenditure incurred for business purposes u/s 37(1) and/or as a business loss u/s 29 of the Act.\" It is humbly submitted that on one hand the AO has already made disallowance of the entire amount u/s 43B and on the other hand, the concerned customers/buyers are not paying the entire amount of the GST, not only the amount of the GST but even the amount of interest and penalty thereon was further deducted resulting into a business loss to the assessee. The claim being made is bona fide one and is arising out of the proceedings. It is further submitted that the above is purely legal grounds of appeal which do not require any fresh investigation of fact in as much as the same are already available on record. We rely on National Thermal Power Corporation Ltd.229 ITR 383 (SC).” The Revenue objects the admission of additional ground of appeal by the assessee on the following facts a) Non – maintainability: The order under Appeal before the Hon’ble ITAT is on the order passed by CPC and confirmed by the Ld. CIT(A) on section 43B. The assessee is raining entire new section i.e. allowability as business loss u/s 37(1) and as business loss u/s 29. Once there is no order of lower authority on these sections, hence no appeal is maintainable. b) The ground raised by the assessee that this is a loss as GST was not paid by the customers hence same is allowable expenditure as business loss. This has never been recorded by the assessee in the audit report or in any accounts. Hence assessee is claiming that his books of accounts and audit reports were wrong or not proper. The Hon’ble Bench, ITAT, Jaipur is requested to adjudicate as per Income Tax Act. c) The assessee has taken ground of Appeal before the Ld. CIT(A) that the AO CPC made disallowance u/s 43B of the IT Act. The reason of this Printed from counselvise.com 23 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. disallowance was due to the fact that the assessee itself has claimed the same in the audit report. The assessee also taken this ground of Appeal before the Ld. CIT(A) and before the Hon’ble ITAT also. Now new ground has been raised having shield of national thermal power corporation of Hon’ble supreme Court and which is wrong interpretation of the findings of the Hon’ble Apex Court. This type of misinterpretation is humbly requested to not to be appreciated and to misguide the Hon’ble Bench, ITAT, Jaipur. 4. ITA No. 199/JPR/2025 (AY 2022-23) A written submission has been placed before the Hon’ble Bench, ITAT Jaipur on 13/05/2025. After that assessee raised additional ground of appeal vide letter dated 18/08/2025 and the same has been reproduced as under: - \"6. Rs. 23,37,923/: The outstanding amount of GST was not paid by the customers and thus having been lost such amount deserves to be allowed as a valid business expenditure incurred for business purposes u/s 37(1) and/ or as a business loss u/s 29 of the Act.\" It is humbly submitted that on one hand the AO has already made disallowance of the entire amount u/s 43B and on the other hand, the concerned customers/buyers are not paying the entire amount of the GST, not only the amount of the GST but even the amount of interest and penalty thereon was further deducted resulting into a business loss to the assessee. The claim being made is bona fide one and is arising out of the proceedings. It is further submitted that the above is purely legal grounds of appeal which do not require any fresh investigation of fact in as much as the same are already available on record. We rely on National Thermal Power Corporation Ltd. 229 ITR 383 (SC).” The Revenue respectfully submits that the submission made in ITA No. 198/JPR/2025 on admissibility of ground raised by the assessee as legal being may be considered in this ITA also. Prayer It is humbly requested that all the 3 Appeals of the assessee may be dismissed. 13. We have heard the rival contentions and perused the material placed on record. The bench noted from the modified grounds of appeal so filed by Printed from counselvise.com 24 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. the assessee that the ground no. 1 being general does not require any specific adjudication, Ground no. 5 is for charge of interest u/s. 234A/B/C which are consequential and Ground no. 6 being general does not require any finding. Ground no 3 is merged with Ground no. 2 thereby leaving Ground no 2 & 4 which are related to the one issue of disallowance u/s. 43B of the Act. Record reveals that the ld. AO CPC has disallowed the GST at Rs. 1,30,43,384/- and Rs. 64,83,823/- being the amount of service tax. So far as regards the amount disallowable u/s. 43B of the Act in the year under consideration the bench noted that there was an outstanding liability for the service tax on each year. Ongoing through the balance sheet as on 31.03.2017 we note that in note 2.3 other payable shows Rs. 82,89,602/- is appearing and in that breakup Rs. 62,99,520/- shows as outstanding as on 31.03.2017. The bench also noted a chart placed on record in the paper book page 17 wherein the correct figure that is disallowable is derived and the same is extracted herein below: Printed from counselvise.com 25 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. As is evident from the above chart that as on 31.03.2017 outstanding service tax was Rs 62,99,520 out of that the assessee paid 26,29,430/- on 30.10.2019 leaving balance of Rs. 36,70,090/- and the service tax of 31.03.2018 was outstanding at Rs. 28,13,732/-. Giving total of Rs. 64,83,823/-. Thus, this figure of 64,83,823/- was neither debited to the profit and loss account nor the same is required to be disallowed in the year under consideration. Thus, the said disallowance is required to be deleted. Be that it may so the bench noted that the amount of service tax outstanding in the book were paid on 30.10.2019 for Rs. 26,29,430/- and Rs. 28,13,732/- is required to be allowed in the previous year in which it was paid as in the earlier year this amount was disallowed. Printed from counselvise.com 26 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. Now coming to the aspect of the GST amount disallowable the bench noted as on 31.03.2019 Rs. 1,72,47,207/- was outstanding and the assessee paid Rs. 1,30,43,654/- on 30.10.2019 the same is allowable as per provision of section 43B since paid before the due date of filling ITR leaving balance disallowable Rs. 42,03,553/- The ld. AO will verify the above figures with challans and delete the amount in accordance with the law as discussed herein above. In terms of these observations, the appeal of the assessee in ITA no. 197/JP/2025 is allowed for statistical purpose. 14. Now we take up the appeal of the assessee in ITA no. 198/JP/2025. In this appeal the assessee has raised the following modified grounds of appeal; 1. The impugned order u/s 143(1) passed by ld.AO on dated 28.12.2022 and confirmed by ld. CIT(A) u/s 250 on dated 27.12.2024 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. Rs.1,71,69,480/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the order passed by ld. AO/CPC in disallowing of Rs.1,71,69,480/- [Rs.1,68,19,314/-(GST)+ Rs. 3,50,167/- (TDS)] made u/s 43B of the Act. The disallowance so made by the ld. AO/CPC is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. Printed from counselvise.com 27 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. 3. Rs.2,19,391/-: The ld. CIT(A) erred in law as well as on the facts of the case in confirming the order passed by ld. AO/CPC in allowing the credit of Prepaid Taxes/TDS of Rs.17,76,812/- instead of Rs.19,96,203/-. The action so made by the ld. AO/CPC is totally contrary to the provisions of law and facts on the record and hence the same kindly be deleted in full. 4. The ld. CIT(A) erred in law as well as on the facts of the case in confirming the interest charged by ld.AO u/s 234A, 234B & 234C of the Act. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, kindly be deleted in full. 5. The appellant prays your honour to add, amend or alter any of the grounds of the appeal on or before the date of hearing. In this appeal, the assessee has raised the additional ground of appeal; “6. Rs.1,68,19,314/-: The outstanding amount of GST was not paid by the customers and thus having been lost such amount deserves to be allowed as a valid business expenditure incurred for business purposes u/s 37(1) and/ or as a business loss u/s 29 of the Act.” 15. Apropos to the grounds of appeal raised by the assessee the relevant finding of the ld. CIT(A) is as under : 5. Decision: 5.1 The main ground of appeal raised by the appellant that the CPC has erred in making a disallowance of Rs. 1,71,69,480/- under section 43B of the Act. On perusal of the Form 3CA in column no. 26(i) (B) (b) wherein it is mentioned that amount of Rs. 1,68,19,314/- and Rs. 3,50,167/- were not paid by the appellant for GST & TDS respectively. The appellant had not submitted the requisite challan even after issue of notice on 08.10.2024, 06.12.2024 & 16.12.2024. 5.2 On careful consideration of the facts and circumstances of the case, it is very clear that the appellant was only required to submit challan of the payment of GST and TDS during the appellate proceedings. However, the appellant in spite of being given ample opportunities has not submitted proof of payment of Challan. It is therefore, presumed that the appellant has not paid the amount payable towards GST and TDS. In view of the above, that the AO CPC correctly made Printed from counselvise.com 28 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. disallowance of Rs. 1,71,69,480/- (1,68,19,314/- and Rs. 3,50,167/-). Accordingly, this ground raised by the appellant is hereby disallowed. 5.3 Further, grounds raised by the appellant for making addition as per provision u/s 115JB of the Act in the book profit of Rs.7,00,000/- on account of income tax paid or payable or its provision including the amount of deferred tax and provision thereof, the AO is hereby directed to verify the same and allow the provision for liability if applicable. The AO is hereby also directed to verify regarding the short credit of TDS deducted to the amount of Rs. 2,19,391/- as claimed by the appellant and allow the same if found in order. Grounds raised regarding charging of interest under section 234B & C are of consequential in nature, hence not adjudicated. Accordingly, the grounds of appeal raised hereby are partly allowed. 6. In the result, the appeals are partly allowed. 16. Feeling dissatisfied with the above findings, the assessee has preferred the present appeal. Apropos to the ground of disallowance of GST u/s. 43B of the Act the ld. AR of the assessee vehemently argued that the considering the provision of section 29 of the Act the correct income is required to be taxed in the hands of the assessee. The ld. AR of the assessee submitted it was due to technical error the assessee could not make the payment and also on account of the fact that certain buyers have not paid the GST to the assessee and therefore, that aspect of the matter the assessee is required to be given the benefit to the extent the same was not realized and benefit of cum tax amount be given to the assessee. 17. Per contra, ld. DR relied upon the fact that the disallowance was made u/s. 143(1) of the Act based on the record already placed on record. Printed from counselvise.com 29 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. The assessee has taken the plea which was not taken before the ld. CIT(A) and therefore, she objected to the prayer of the assessee. The contention of the assessee that the GST account of the assessee was blocked and therefore, the payment could not be made is not the correct plea and is against the provision of law she relied upon the order of the ld. CIT(A). 18. We have heard the rival contentions and perused the material placed on record. Ground no. 1 raised by the assessee being general does not require our specific finding. Ground no. 2 relates to the disallowance of Rs. 1,71,69,480/- on this aspect of the matter the ld. AR of the assessee raised two folded arguments. One that is made is that the assessee before the due date of filling the return paid amount be allowed while computing the income of the assessee. Second the amount debited to the profit and loss account for the year under consideration can only be disallowed and in that the amount which was not realized the cum tax benefit be given. The arguments of the assessee and we are of the considered view that both plea of the assessee are in accordance with the law as section 43B of the Act specify that amount paid before the due date of filling the return of income is not supposed to be disallowed even thought the same was outstanding at the year. So far as the arguments of the amount debited to the current year be disallowed is also correct and cum tax benefit is nothing Printed from counselvise.com 30 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. but amount of debtor not being realized be considered accordingly. Ld. AO is directed to verify this aspect of the matter and pass appropriate order in accordance with law. Based on this observation ground no. 2 raised by the assessee is allowed for statistical purpose. Ground no. 3 also require the correct amount lying as credit on account of prepaid taxed be given credit to the assessee. This being the factual aspect of the verification at the end of the ld. AO, we direct the ld. AO pass appropriate relief to the assessee in accordance with law. Based on this observation the appeal of the assessee in ITA no. 198/JP/2025 is allowed for statistical purposes. 13. The fact of the case in ITA Nos. 199/JP/2025 is similar to the case in ITA No. 198/JP/2025 and we have heard both the parties and persuaded the materials available on record. The bench has noticed that the issues raised by the assessee in ITANo. 199/JP/2025 are equally similar on set of facts and grounds as that of with 198/JP/2025. Therefore, it is not imperative to repeat the facts and various grounds raised by both the parties. Hence, the bench feels that the decision taken by us in ITA No. 198/JP/2025 for Assessment Year 2021-22 shall apply mutatis mutandis in Printed from counselvise.com 31 ITA Nos. 197 to 199/JP/2025 Ahluwalia Erectors & Fabricators Pvt. Ltd. the case of Ahluwalia Erectors & Fabricators Pvt. Ltd. in ITA Nos. 199/JP/2025 for the Assessment Years 2022-23. In the result the appeal of the assessee in ITA no 199/JP/2025 is allowed for statistical purposes. In the result, all the appeal of the assessee are allowed for statistical purposes Order pronounced in the open court on 12/11/2025. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 12/11/2025 *Ganesh Kumar, Sr. PS vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Ahluwalia Erectors & Fabricators Pvt. Ltd., Kota 2. izR;FkhZ@ The Respondent- DCIT/ACIT, Circle-02, Kota 3. vk;djvk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZQkbZy@ Guard File (ITA Nos. 197 to 199/JP/2025) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "