Nafe Singh Gahlawat, Faridabad V. ACIT, Faridabad

ITA 1028/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4103 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 25-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 24-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MONGA
• Keywords: Additional evidence
• Section: 43B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO.1028/DEL/2011 ASSESSMENT YEAR : 2007-08 NAFE SINGH GAHLAWAT, H.NO.1032, SECTOR 14, FARIDABAD. PAN : AANPG3944N VS. ACIT, CIRCLE-1, FARIDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GURJEET SINGH, CA REVENUE BY : SHRI A.K. MONGA, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER OF THE CIT (A) DATED 13 TH DECEMBER, 2010 FOR ASSESSMENT YEAR 2007-08. THE GROUNDS OF APPEAL READ AS UNDER:- 1. BECAUSE THE ACTION FOR UPHOLDING THE SERVICE TAX (UNPAID/LIABILITY) AMOUNT FOR RS.311613/- IS BEING CHALLENGED ON FACTS AND LAW AND EVEN THE BASIS OF ADD ITION ARE AGAINST THE PRINCIPLES OF LAW SINCE EVEN THE LIABI LITY CANNOT BE TREATED AS AN INCOME. 2. BECAUSE, THE ACTION FOR UPHOLDING THE SERVICE TAX (UNPAID/LIABILITY) AMOUNT FOR RS.311613/- IS BEING CHALLENGED SINCE NOT HAVE RETURNED ANY POSITIVE FINDIN G FOR THE INCLUSION ONCE HAVING ADMITTED THE ADDITIONAL EVIDENCES AND DISCLOSED AS PART OF THE CURRENT LIABI LITIES IN ACCORDANCE WITH THE METHOD OF ACCOUNTING FOR ANOTHER CENTRAL GOVERNMENT DEPARTMENT. 3. BECAUSE, THE ACTION FOR UPHOLDING THE SERVICE TAX (UNPAID/LIABILITY) AMOUNT FOR RS.311613/- IS BEING CHALLENGED SINCE NOT PAID BEFORE DUE DATE OF FILING O F RETURN ITA NO.1028/DEL/2011 2 CHALLENGED SINCE NOT PAID BEFORE DUE DATE OF FILING O F RETURN U/S 43B WHEREAS PER ASSESSEE THE SAME IS NOT STATUTORY LIABILITY U/S 43B. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN COMMISSION RECE IPTS OF ` 67,02,289/- OUT OF WHICH A SUM OF ` 7,30,899/- WAS DE DUCTED ON ACCOUNT OF SERVICE TAX AND, IN THIS MANNER, THE COMMI SSION RECEIPTS WERE SHOWN AT ` 59,71,390/-. SINCE THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT, THE ASSESSING OFFICER INFERRED THAT TH E ASSESSEES CLAIM COULD NOT BE VERIFIED AND, IN THIS MANNER, AN ADDITION OF ` 7,30,899/- WAS MADE ON ACCOUNT OF SERVICE TAX. THE A DDITION WAS CONTESTED IN AN APPEAL FILED BEFORE THE CIT (A). AS A FINDING OF FACT, LEARNED CIT (A) HAS OBSERVED THAT OUT OF TOTAL DISALLO WANCE OF `7,30,899/- THE ASSESSEE HAS MADE THE PAYMENT OF SERVICE TAX WITHIN THE DUE DATE OF FILING THE RETURN OF INCOME OF A SUM OF `4,19,286/- AND THE BALANCE ADDITION OF ` 3,11,613/- HAS BEEN CONFIR MED ON ACCOUNT OF NON-PAYMENT OF THE SAME BEFORE THE DUE DATE OF FILIN G THE RETURN. 3. BEFORE US, IT IS THE CASE OF LEARNED COUNSEL OF THE ASSESSEE THAT ACCORDING TO THE DECISION OF CO-ORDINATE BENCH IN TH E CASE OF ACIT VS. REAL IMAGE MEDIA TECHNOLOGIES PVT. LTD. 114 ITD 573 (CHENNAI), DISALLOWANCE U/S 43B COULD NOT BE IN RESPECT OF SERVICE TAX BILLED, BUT NOT RECEIVED. IT WAS OBSERVED THAT SERVICE TAX THOUGH BILLED, BUT NOT RECEIVED HAD NOT BECOME PAYABLE TO THE CREDIT OF CE NTRAL GOVERNMENT BY VIRTUE OF SECTION 68 OF THE FINANCE ACT, 1994, R EAD WITH RULE 6 OF THE SERVICE TAX RULES 1994 AND, THEREFORE, IT COULD NOT BE DISALLOWED U/S 43B. IT WAS FURTHER OBSERVED THAT THE ASSESSEE SERVICE PROVIDER IS MERELY ACTING AS AN AGENT OF THE GOVERNMENT AND IS NO T ENTITLED TO CLAIM DEDUCTION ON ACCOUNT OF SERVICE TAX AND, THERE FORE, NO DISALLOWANCE COULD BE MADE ON THE ANALOGY OF SALES TAX , EXCISE DUTY, ETC. HE, THEREFORE, PLEADED THAT ON ACCOUNT OF APP LICATION OF SECTION ITA NO.1028/DEL/2011 3 43B, SUCH ADDITION COULD NOT BE MADE IN RESPECT OF SER VICE TAX WHICH HAS BEEN BILLED, BUT NOT RECEIVED. FURTHER, HE SUBMI TTED THAT THE ASSESSEE HAD ALSO DEPOSITED THE SERVICE TAX WHEN IT WAS REC EIVED BY IT AND, IN THIS MANNER, HE PLEADED THAT THE ADDITION UP HELD BY THE CIT (A) WAS NOT CALLED FOR, AND, HENCE, SHOULD BE DELETED. H E ALSO REFERRED TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOBLE & HEWITT (INDIA) (P) LTD. 305 ITR 324 (DEL) WHEREIN I T WAS OBSERVED THAT SECTION 43B WAS NOT TO BE APPLIED IN RESPECT OF SERVIC E TAX COLLECTED BY THE ASSESSEE WHICH WAS NOT DEBITED TO THE PROFIT & LOSS AC COUNT AS AN EXPENDITURE. 4. ON THE OTHER HAND, RELYING UPON THE ORDER OF CIT (A) IT WAS PLEADED BY LD. DR THAT HE HAS RIGHTLY UPHELD THE DISA LLOWANCE IN RESPECT OF AMOUNT WHICH WAS NOT PAID BY THE ASSESSEE BEFO RE THE DUE DATE OF FILING THE RETURN. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. ACCORDING TO THE DEC ISION OF CO-ORDINATE BENCH IN THE CASE OF ACIT VS. REAL IMAGE MEDIA TECHNO LOGIES PVT. LTD. (SUPRA), SECTION 43B COULD NOT BE APPLIED IN RESPECT OF AMOUNT OF SERVICE TAX WHICH HAS BEEN BILLED, BUT NOT RECEIVED. NO CONTRARY DECISION HAS BEEN CITED BY LEARNED DR. THIS ISSUE HAS BE EN DISCUSSED IN DETAIL BY THE CO-ORDINATE BENCH IN THE FOLLOWING PARAS:- 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY IN THE LIGHT OF THE RELEVANT PROVISIONS OF THE IT ACT AS WELL A S SERVICE- TAX ACT. WE FIND THAT RELEVANT PORTION OF S.43B READS AS UNDER : '43B. NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RESPECT OF ( A ) ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY, CESS OR FEE, BY WHATEVER NAME CALLED, UNDER ANY LAW FOR TH E TIME BEING IN FORCE, OR.' ITA NO.1028/DEL/2011 4 FROM A PLAIN READING OF THE ABOVE PROVISION IT BECOME S CLEAR THAT THE RIGOUR OF THIS PROVISION WOULD BE ATTRACTED ONLY IN A CASE WHERE AN ITEM IS ALLOWABLE AS DEDUCTION BUT BECAUSE OF THE FAILURE TO MAKE PAYMENT SUCH DEDUCTION WILL NOT BE ALLO WED. IT CAN BE ARGUED THAT IN THE CASE OF SALES-TAX ALSO THE ASS ESSEE DOES NOT CLAIM DEDUCTION SINCE IT HAS BEEN HELD THAT NONPAYMENT OF SALES-TAX WOULD ATTRACT PROVISIONS OF S. 4 3B, BUT THAT IS BEING DONE ON THE BASIS OF THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF CHOWRINGHEE SALES BUREAU (P.) LTD. V. CIT [1977] 110 ITR 385 [SIC-1973 CTR (SC) 44 : [1973] 87 ITR 524 (SC)] THAT SALES-TAX IS PART OF THE TRADING RE CEIPT. FURTHER, S.145A CLEARLY PROVIDES THAT FOR THE PURPOSE O F DETERMINING INCOME UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION, THE AMOUNT OF PURCHASE AND SA LES I.E. , TURNOVER WOULD INCLUDE ANY TAX, DUTY, CESS OR FEE. THE REFORE, THE RIGOUR OF S. 43B MAY BE APPLICABLE IN THE CASE OF SA LES-TAX OR EXCISE DUTY BUT THE SAME CANNOT BE SAID TO BE THE POSITION IN CASE OF SERVICE-TAX BECAUSE OF TWO REASONS. FIRSTLY, TH E ASSESSEE IS NEVER ALLOWED DEDUCTION ON ACCOUNT OF SERVICE-TAX W HICH IS COLLECTED ON BEHALF OF THE GOVERNMENT, AND PAID TO THE GOVERNMENT, ACCORDINGLY. THEREFORE, A SERVICE PROVID ER IS MERELY ACTING AS AN AGENT OF THE GOVERNMENT, AND IS NOT ENTITLED TO CLAIM DEDUCTION ON ACCOUNT OF SERVICE-TAX. HENCE, ON THIS ACCOUNT ALONE ADDITION UNDER SECTION 43B COULD NOT BE M ADE AND THE SAME HAS BEEN CORRECTLY DELETED BY THE CIT (A). 14. THE SECOND ASPECT OF THIS ISSUE IS ALSO IMPORTANT. SEC. 43B( A ) USES THE EXPRESSION 'ANY SUM PAYABLE'. FOR MAKING ANY DISALLOWANCE, FIRST OF ALL IT HAS TO BE ESTABLISHED THAT SUCH SUM IS PAYABLE. THE DICTIONARY MEANING OF THE WORD 'PAYABLE' IN CONCISE OXFORD ENGLISH DICTIONARY IS: (1) REQUIRED TO BE PAID; (2) ABLE TO BE PAID; AND (3) DEBTS OWNED BY A BUSINESS. THE CHAMBERS DICTIONARY (NEW EDITION) DEFINES THE WORD 'PAYABLE' AS 'THAT MAY OR SHOULD BE PAID; DUE OR PROF ITABLE'. BLACK'S LAW DICTIONARY, SIXTH EDITION, DEFINES THE TERM 'PAYABLE 'AS UNDER : 'CAPABLE OF BEING PAID; SUITABLE TO BE PAID; ADMITTING OR DEMANDING PAYMENT; JUSTLY DUE; LEGALLY ENFORCEABLE. A SUM OF MONEY IS SAID TO BE PAYABLE WHEN A PERSON IS UNDER O BLIGATION TO PAY IT.' PAYABLE SIGNIFIES AN OBLIGATION TO PAY AT A FUTURE TIME, BUT WHEN USED WITHOUT QUALIFICATION, TERM NORMALLY MEANS THAT THE DEBT IS PAYABLE AT ONCE, AS OPPOSED TO 'OWING'.' THE ABOVE DEFINITION WOULD SHOW THAT THE WORD 'PAYABLE' IS USED IN SECTION 43B, TO OUR UNDERSTANDING, WOULD MEAN THAT THE RE IS A KIND OF OBLIGATION ON THE PART OF PAYEE TO MAKE THE PAYM ENT ITA NO.1028/DEL/2011 5 WHICH IS ALREADY DUE. FOR EXAMPLE, WHEN SOMEBODY PU RCHASES GOODS THEN THE OTHER PERSON HAS GOT THE LIABILITY TO PAY TH E PRICE OF THE GOODS AND IT CAN BE SAID THAT PRICE OF THE GOODS IS PAYABLE BY THE CUSTOMER. IF THE CUSTOMER SIMPLY LOOKS AT THE COST IT CANNOT BE SAID THAT HE HAS BECOME LIABLE TO MAKE THE PAY MENT. THIS CAN BE FURTHER UNDERSTOOD BY WAY OF AN EXAMPLE. FOR INSTANCE, WHENEVER A CHARTERED ACCOUNTANT RAISES A BILL FOR PROFESSIONAL SERVICES WHICH ARE SUBJECTED TO SERVICE- TAX, IT IS NOT NECESSARY THAT THE CLIENT WILL ACCEPT THE BILL AS SUCH AN D MAKE PAYMENT ACCORDINGLY. IN THAT SITUATION, THE CHARTERED ACCO UNTANT CANNOT BE FASTENED WITH THE LIABILITY TO PAY THE SERVICE-TA X. BUT, IN ANY CASE THE SALES-TAX SITUATION IS DIFFERENT. FOR EX AMPLE, SECTION 6(1) OF CENTRAL SALES-TAX ACT, 1956 PROVIDES THA T: '6. LIABILITY TO TAX ON INTER-STATE SALES. -(1) SUBJECT TO THE OTHER PROVISIONS CONTAINED IN THIS ACT, EVERY DEALER SHALL, WITH EFFECT FROM SUCH DATE AS THE CENTRAL GOVERNMENT MAY, BY NOTIFIC ATION IN THE OFFICIAL GAZETTE, APPOINT, NOT BEING EARLIER THAN THIRTY DAYS FROM THE DATE OF SUCH NOTIFICATION, BE LIABLE TO PAY TAX UNDER THIS ACT ON ALL SALES OF GOODS OTHER THAN ELECTRICAL ENERGY EFFECTED BY HIM IN THE COURSE OF INTER-STATE TRADE OR COMMERCE DURIN G ANY YEAR ON AND FROM THE DATE SO NOTIFIED : PROVIDED THAT A DEALER SHALL NOT BE LIABLE TO PAY TAX UN DER THIS ACT ON ANY SALE OF GOODS WHICH, IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION (3) OF SECTION 5, IS A SALE IN THE COURSE OF EXPORT OF THOSE GOODS OUT OF THE TERRITORY OF INDIA.' THE ABOVE PROVISION CLEARLY SHOWS THAT THE DEALER WOUL D BECOME LIABLE TO MAKE SALES-TAX PAYMENT THE MOMENT HE EFFECTS THE SALES IN THE COURSE OF AN INTER-STATE TRADE OR COMMERCE. THIS SHOWS THAT THE LIABILITY TO MAKE PAYMENT OF SALES-TAX IS N OT DEPENDING ON FACT WHETHER SUCH DEALER HAS RECEIVED THE PAYMENT FROM THE CUSTOMER OF GOODS OR NOT. THE LIABILITY IS FASTENED TO TRANSACTION IN SALES AND ONCE SUCH SALE IS EFFECTED, DEALER BECOMES LIABLE TO PAY. 15. NOW, IN THE CASE OF SERVICE-TAX, WHEN AND HOW THE AMOUNT BECOMES PAYABLE HAS BEEN PROVIDED IN S. 68 OF FINAN CE ACT, 1994 AS WELL AS R. 6 OF SERVICE-TAX RULES WHICH READ AS UNDER: '68. PAYMENT OF SERVICE-TAX -(1) EVERY PERSON PROVIDING TAXABLE SERVICE TO ANY PERSON SHALL PAY SERVICE-TAX AT THE RATE SPECIFIED IN S. 66 IN SUCH MANNER AND WITHIN SUCH PERIOD AS MA Y BE PRESCRIBED. (2) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-S. (1), IN RESPECT OF ANY TAXABLE SERVICE NOTIFIED BY THE CENTRAL GOVERNME NT IN THE OFFICIAL GAZETTE, THE SERVICE-TAX THEREON SHALL BE PAID BY SUCH PERSON AND IN SUCH MANNER AS MAY BE PRESCRIBED AT THE RATE SPECIFIED IN S. 66 AND ALL THE PROVISIONS OF THIS CHA PTER SHALL ITA NO.1028/DEL/2011 6 APPLY TO SUCH PERSON AS IF HE IS THE PERSON LIABLE FO R PAYING THE SERVICE-TAX IN RELATION TO SUCH SERVICE.' RULE 6 OF SERVICE-TAX RULES : '6. PAYMENT OF SERVICE-TAX -(1) THE SERVICE-TAX SHALL BE PAID TO THE CREDIT OF THE CENTRAL GOVERNMENT BY THE 5TH OF THE MONTH IMMEDIATELY FOLLOWING THE CALENDAR MONTH IN WHICH THE PAYMENTS ARE RECEIVED, TOWARDS THE VALUE OF TAXABLE SER VICE: PROVIDED THAT WHERE THE ASSESSEE IS AN INDIVIDUAL OR P ROPRIETARY FIRM OR PARTNERSHIP FIRM, THE SERVICE-TAX SHALL BE PAI D TO THE CREDIT OF THE CENTRAL GOVERNMENT BY THE 5 TH OF THE MONTH IMMEDIATELY FOLLOWING THE QUARTER IN WHICH THE PAYMENTS ARE RECEIVED, TOWARDS THE VALUE OF TAXABLE SERVICES: PROVIDED FURTHER THAT NOTWITHSTANDING THE TIME OF RECEIPT O F PAYMENT TOWARDS THE VALUE OF SERVICES, NO SERVICE-TAX S HALL BE PAYABLE FOR THE PART OR WHOLE OF THE VALUE OF SERVICES , WHICH IS ATTRIBUTABLE TO SERVICES PROVIDED DURING THE PERIOD WHEN SUCH SERVICES WERE NOT TAXABLE: PROVIDED ALSO THAT THE SERVICE-TAX ON THE VALUE OF TAXABL E SERVICES RECEIVED DURING THE MONTH OF MARCH, OR THE QU ARTER ENDING IN MARCH, AS THE CASE MAY BE, SHALL BE PAID TO THE CREDIT OF THE CENTRAL GOVERNMENT BY THE 31ST DAY OF MARCH OF THE CALENDAR YEAR.' FROM THE ABOVE SECTION 68 IT BECOMES CLEAR THAT SERVICE- TAX HAS TO BE PAID IN THE MANNER WHICH MAY BE PRESCRIBED AND THIS HAS BEEN PRESCRIBED IN R. 6 OF SERVICE-TAX RULES. A PLAI N READING OF R. 6 WOULD SHOW THAT SERVICE PROVIDER BECOMES LIABLE TO M AKE THE PAYMENT OF SERVICE-TAX BY THE 5TH OF THE MONTH IMMEDIATELY FOLLOWING THE CALENDAR MONTH IN WHICH THE PAYMENTS ARE RECEIVED TOWARDS THE VAL UE OF TAXABLE SERVICE. THE FIRST PROVISO GIVES AN EXCEPTION IN CASE OF INDIVIDUAL OR PROPRIETARY FIRM OR PARTNERSHIP FIRM, A ND IN SUCH CASES, SERVICE-TAX HAS TO BE PAID TO THE CREDIT OF CENTRA L GOVERNMENT BY THE 5TH OF THE MONTH IMMEDIATELY FOLLOWING THE QUARTER IN WHICH THE PAYMENTS ARE RECEIVED. THE ONLY D IFFERENCE IS THAT IN CASE OF INDIVIDUAL OR PROPRIETARY OR PARTNER SHIP FIRM, PAYMENT HAS TO BE MADE ON 5TH OF THE FOLLOWING MONTH AFTE R THE FOLLOWING QUARTER WHEREAS IN THE CASE OF OTHER ORGANIS ATIONS IT HAS TO BE PAID ON THE 5TH OF THE MONTH IMMEDIATELY FOLLOW ING THE CALENDAR MONTH. BUT, IN BOTH THE CASES, THE LIABILITY ARISES TO MAKE THE PAYMENT ONLY AFTER THE SERVICE PROVIDER HAS RE CEIVED THE PAYMENTS. 16. IF THERE IS NO LIABILITY TO MAKE THE PAYMENT TO THE CR EDIT OF CENTRAL GOVERNMENT BECAUSE OF NON-RECEIPT OF PAYMENTS F ROM THE RECEIVER OF THE SERVICES, THEN IT CANNOT BE SAID THAT SUCH ITA NO.1028/DEL/2011 7 SERVICE-TAX HAS BECOME PAYABLE IN TERMS OF CLAUSE ( A ) OF SECTION 43B BECAUSE THAT CLAUSE SPECIFICALLY MENTIONS 'SUM PAY ABLE BY THE ASSESSEE'. IN THIS REGARD, THE HON'BLE ANDHRA PRAD ESH HIGH COURT IN THE CASE OF SRIKAKOLLU SUBBARAO & CO. V. NION OF INDIA (SUPRA) HAS MADE THE FOLLOWING OBSERVATIONS : '17. ONE OTHER CONTENTION ADDRESSED TO US IS THAT THE LIAB ILITY TO PAY SALES-TAX FOR THE MONTH OF 18TH MARCH, 1984, WAS DI SALLOWED IN TERMS OF SECTION 43B IN ALL THE CASES BEFORE US. SH RI SWAMY, LEARNED COUNSEL, POINTED OUT THAT THE PETITIONERS FILED ASSESSMENT ORDER MONTHLY RETURNS ACCORDING TO WHICH THEY PAY THE TAXES. OUR ATTENTION HAS BEEN INVITED TO R. 17 OF THE A .P. SALES-TAX RULES, 1957, WHICH IN TERMS, PROVIDES THAT THE TAX IN RELATION TO THE RETURN SHALL BE PAID BEFORE THE 25TH DAY OF THE SUCCEEDING MONTH. IT IS ARGUED THAT WHERE THE STATUTE ITSELF PRESCRIBES THE DATE OF PAYMENT NO EXCEPTION COULD BE TAK EN ACTING UNDER S. 43B, THAT THE AMOUNT WAS NOT PAID RENDERI NG JUSTIFICATION FOR ITS DISALLOWANCE. IT IS URGED THAT SECTI ON 43B CAN HAVE NO APPLICATION TO CASES WHERE THE STATUTORY LIABILITY WHICH WAS INCURRED IN THE ACCOUNTING YEAR IS ALSO NOT PAYABL E ACCORDING TO THE STATUTE IN THE SAME ACCOUNTING YEAR. WE F IND CONSIDERABLE FORCE IN THE CONTENTION OF SHRI SWAMY. IN ORDER TO APPLY THE PROVISIONS OF S. 43B, IT SEEMS TO US THAT NOT O NLY SHOULD THE LIABILITY TO PAY THE TAX OR DUTY BE INCURRED I N THE ACCOUNTING YEAR BUT THE AMOUNT ALSO SHOULD BE STATUTORILY 'PAYABLE' IN THE ACCOUNTING YEAR. SEC. 43B ITSELF IS C LEAR TO THIS EXTENT. IT REFERS TO THE 'SUM PAYABLE' IN CLAUSE ( A ) AS WELL AS IN CLAUSE ( B ). IF THE LEGISLATURE INTENDED, IT SHOULD HAVE SO PROVI DED THAT ANY SUM FOR THE PAYMENT OF WHICH LIABILITY WAS INCU RRED BUT THE ASSESSEE WOULD NOT BE ALLOWED UNLESS SUCH SUM IS ACTUALLY PAID. KEEPING IN MIND THE OBJECT FOR WHICH SECTION 43B WAS ENACTED, IT IS DIFFICULT TO SUBSCRIBE TO THE VIEW THAT A RO UTINE APPLICATION OF THAT PROVISION IS CALLED FOR IN CASES W HERE THE 'TAXES AND DUTIES' FOR THE PAYMENT OF WHICH LIABILITY WA S INCURRED IN THE ACCOUNTING YEAR, WERE NOT STATUTORILY PAYABLE IN TH AT ACCOUNTING YEAR. IF, UNDER THE PROVISIONS OF ANY STATUTE , A TAX OR DUTY IS PAYABLE AFTER THE CLOSE OF THE ACCOUNTING YEAR, DIFFERENT CONSIDERATION WOULD PREVAIL AND IT MAY NOT BE OPEN TO THE ITO TO DISALLOW TAX OR DUTY WHICH IS STATUTORILY PAYABLE AFTER THE ACCOUNTING YEAR. IN FACT, THE AMENDMENT BROUGHT ABOUT, WHICH IS COMING INTO FORCE ON 1ST APRIL 1988, PERMITTING THE DEDUCTION OF TAXES AND DUTIES PAID BEFORE THE FILING OF THE IT RETURNS CLEARLY SUPPORTS THE VIEW THAT 'TAXES AND DUTIES' NOT STATUTORILY PAYABLE DURING THE ACCOUNTING YEAR DO NOT FALL TO BE DI SALLOWED UNDER SECTION 43B.' 17. IN VIEW OF THE ABOVE OBSERVATIONS, WE ARE OF THE V IEW 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. UNDER THESE CIRCUMSTANCES, WE FIND NOTHING W RONG ITA NO.1028/DEL/2011 8 WITH THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE SAME IS CONFIRMED. 18. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN VIEW OF THE AFOREMENTIONED DECISION, WE FIND N O JUSTIFICATION IN THE DISALLOWANCE UPHELD BY THE LEARNED CIT (A). THE SAME IS DELETED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 29.04.20 11. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 29.04.2011. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES ITA NO.1028/DEL/2011 9 DATE OF DICTATION 25.4.2011 DATE OF PRESENTATION OF THE DRAFT ORDER TO THE MEMBER 26.4.2011 DATE OF RETURN FROM THE BENCH AFTER PRONOUNCEMENT &SIGNING DATE OF DISPATCH OF THE ORDER TO THE BENCH