Assistant Commissioner of Income Tax-1(2), RAIPUR V. Hora Transport Company Private Limited, RAIPUR

ITA 174/BIL/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94006 (ITAT-RAIPUR)
• Duration Of Justice: 3 year(s) 10 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 01-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: R B DOSHI
• Section: 43B; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH , RAIPUR BEFORE S/SHRI MUKUL K SHRAWAT, ( JM) AND SHAMIM YAHYA,(AM) I TA . NO . 1 7 4 / BLPR / 201 1 (ASSESSMENT YEAR : 200 8 - 09 ) ASSTT. COMMISSIONER OF INCOME TAX - 1 (2), RAIPUR (CG) VS. M/S HORA TRANSPORT CO.PVT.LTD., BILASPUR ROAD, RAIPUR (CG). APPELLANT .. RESPONDENT PAN/GIR NO. : AA ACH7540K APPELLANT BY : SHRI D K JAIN RESPONDENT BY : SHRI R B DOSHI DATE OF HEARING : 1 5 .6.2015 DATE OF PRO NOUNCEMENT : 19 . 6. 201 5 O R D E R PER MUKUL K SHRAWAT, ( JM) : TH IS IS AN APPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF LD. CIT(A) DATED 29.4. 2011 FOR THE ASSESSMENT YEAR 200 8 - 09 . 2. T HE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. WHETHER IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN DELETING THE ADDITION OF RS. 32,50,873/ - MADE BY THE AO APPLYING THE PROVISIONS OF SECTION 43B OF THE IT ACT. 2 . THE ORDER OF THE LD. CIT(A) IS ERRONEOUS BOTH IN LAW AND ON FACTS 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER DATED 29.12.2010 PASSED UNDER SECTION 143(3) OF THE ACT ARE THAT THE ASSESSEE IS ENGAGED IN TRANSPORTATION BUSINESS. IT WAS OBSERVED BY THE AO THAT THE ASSESSEE HAD C OLLECTED SERVICE TAX AMOUNTING TO RS.32,50,873.83 , WHICH WAS REMAINED UNPAID. HENCE, A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO SHOW CAUSE AS TO WHY THE SAME SHOULD NOT BE DISALLOWED UNDER SECTION 43B OF THE ACT. THE EXPLANATION OF THE ITA. NO. 17 4 / BLPR/201 1 2 ASSESSEE WA S THAT THE AMOUNT OF SERVICE TAX WAS DIRECTLY CREDIT ED TO THE SEPARATE SERVICE TAX ACCOUNT, SHOWN AS LIABILITY IN THE BALANCE SHEET . IT WAS ALSO EXPLAINED THAT NO DEDUCTION WAS CLAIMED IN THE PROFIT AND LOSS ACCOUNT . HOWEVER, THE AO WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE AND HELD THAT THE OBJECT OF PROVISIONS OF SECTION 43B OF THE ACT WAS TO CURB THE PRACTICE OF WITHHOLDING A GOVERNMENT DUES. RESULTANTLY, THE IMPUGNED AMOUNT WAS TAXED . 4 . WHEN THE MATTER WAS CARRIED BEFORE THE FIR ST APPELLATE AUTHORITY, THE FIRST APPELLATE AUTHORITY HAS HELD THAT THE ADMITTED FACTUAL POSITION WAS THAT THE SAID AMOUNT WAS NOT CLAIMED IN THE PROFIT AND LOSS ACCOUNT AS DEDUCTI ON . HE HAS ALSO REFERRED FEW CASE LAWS AND FINALLY HELD THAT THE SEPARATE A CCOUNT WAS MAINTAINED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WHICH HAS NOT EFFECTED THE PROFIT OF THE ASSESSEE, HENCE, DISALLOWANCE WAS WRONGLY MADE BY T HE AO. AGAINST THE RELIEF GRANTED, THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. 5 . HAVING HEARD T HE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTED THAT IT IS CORRECT THAT SEPARATE ACCOUNT HAS BEEN MAINTAINED BY THE ASSESSEE AS SERVICE TAX PAYABLE, PLACED AT PAGE 7 OF THE ASSESSEES PAPER BOOK. IN THIS ACCOUNT, SERVICE TAX ON TRANSPORTATION BILLS COLL ECTED WAS CREDITED AND THE AMOUNT DEPOSITED WAS DEBITED. IT HAS ALSO BEEN INFORMED THAT THE SAME METHOD WAS ADOPTED BY THE ASSESSEE. IN THIS CONNECTION, THE RELIANCE WAS PLACED ON THE DECISION OF THE THIRD MEMBER BENCH OF THE TRIBUNAL, CHENNAI IN THE CAS E OF DYNAVISION LTD V/S ACIT (2009) 121 ITD 0461(CHENNAI). IN THIS DECISION, A VIEW WAS EXPRESSED THAT SECTION 43B SHOULD BE INVOKED WHEN THE DEDUCTION HAS BEEN CLAIMED. IT HAS ALSO BEEN HELD THAT SINCE THE IMPORTED GOODS WERE NOT RELEASED FROM THE BONDED WAREHOUSE, AND IT WAS SHOWN AS CLOSING STOCK, THEREFORE , THE CUSTOMS DUTY GOT REFLECTED ON THE DEBIT SIDE AS WELL AS CREDIT SIDE OF THE SAID ACCOUNT. HENCE, FINDING WAS GIVEN THAT THE PROVISIONS OF SECTION 43B COULD NOT BE APPLIED TO THE CUSTOMS DUTY LI ABILITY REMAINED UNPAID. ALTHOUGH THESE FINDINGS WERE GIVEN BY THE RESPECTED CO - ORDINATE BENCH ITA. NO. 17 4 / BLPR/201 1 3 BUT IN THIS APPEAL THE FACT IS THAT THE SERVICE TAX HAS NO IMPACT EITHER ON THE VALUATION OF THE OPENING STOCK OR VALUATION OF CLOSING STOCK. IF THE SERVICE TAX REMAINED UNPAID AND ALSO REMAIN ED UNNOTICED THEN THE PURPOSE OF INTRODUCTION OF SECTION 43B SHALL BE DEFEAT ED . ALTHOUGH THERE ARE FEW POINTS AS DISCUSSED HEREINABOVE BUT ULTIMATELY WE HAVE TO FOLLOW THE DECISION OF THE HONBLE DELHI HIGH COURT PRO NOUNCED IN THE CASE OF CIT V/S NOBLE & HEWITT (I) (P.) LTD. (2008) 305 ITR 0324(DELHI) , WHEREIN IT WAS HELD THAT ALTHOUGH THE ASSESSEE HAS NOT PAID PART OF SERVICE TAX COLLECTED TO THE GOVERNMENT BUT IT WAS NOT DEBITED TO ITS PROFIT AND LOSS ACCOU NT AS AN EXPENDITURE NOR CLAIMED ANY DEDUCTION ; HENCE NOT TO BE DISALLOWED UNDER THE PROVI SIONS OF SECTION 43B OF THE ACT. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT, WE HEREBY DISMISS T HE APPEAL OF THE REVENUE . 6 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19TH JUNE , 201 5 SD SD ( SHAMIM YAHYA ) ( MUKUL K SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER RAIPUR : 19TH JUNE,2015. SRL , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - CONCERNED 4. CIT CONCERN ED 5. DR, ITAT, RAIPUR CONCERNED 6. GUARD FILE. BY ORDER, TRUE COPY SENIOR PRIVATE SECRETARY /ASSTT.REGISTRAR RAIPUR