Vinod Kumar Prop., Aligarh V. A.C.I.T., Circle-1, Aligarh

ITA 23/AGR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0658 (ITAT-AGRA)
• Duration Of Justice: 6 year(s) 3 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-05-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 23-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIOM SINGH
• Keywords: Business expenditure
• Section: 43B; 234B; 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO.23/AGRA/2013 ASSESSMENT YEAR: 2008-09 SHRI VINOD KUMAR, VS. ASSTT. COMMISSIONER OF IN COME TAX, POP. M/S. ARVIND BROTHERS, CIRCLE-I, ALIGARH. 9/8, GURIYA BAGH, ALIGARH. (PAN : ACNPK 3827 E). (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ GARGH, ADVOCATE RESPONDENT BY : SHRI HARIOM SINGH, JR. D.R. DATE OF HEARING : 10.05.2013 DATE OF PRONOUNCEMENT : 17.05.2013 ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 16.10.2012 PASSED BY THE LD. CIT(A), MUZAFFARNAGAR FOR THE ASS ESSMENT YEAR 2008-09. 2. THE EFFECTIVE GROUNDS RAISED IN THIS APPEAL READ AS UNDER :- 1. BECAUSE THE LD. CIT(A) HAS WRONGLY AND ILLEGALL Y CONFIRMED THE ADDITION OF RS.2,84,911/- BEING THE AMOUNT OF SERVI CE TAX PAID IN THE RELEVANT PREVIOUS YEAR WHICH INCLUDES SERVICE TAX O F EARLIER YEARS ALSO. 2 ITA NO.23/AGRA/2013 A.Y. 2008-09 2. BECAUSE WHILE SUSTAINING THE ADDITION THE LD. CI T(A) HAS ERRED BOTH IN LAW AND ON FACTS IN IGNORING AND NOT PROPER LY APPRECIATING THE PROVISION OF SECTION 43B OF THE INCOME TAX ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS CLAIMED SERVICE TAX EXPENSES OF RS.2,84,911/-. THE A.O. MADE ADDITION OF THE SAID AMOUNT ON THE GR OUND THAT THE SERVICE TAX PAID BY THE ASSESSEE PERTAINED TO EARLIER YEARS. THEREF ORE, THE CLAIM OF THE ASSESSEE IS NOT ALLOWABLE. THE ASSESSEE DID NOT FURNISH COMPLE TE DETAILS UNDER WHICH THIS EXPENDITURE IS ALLOWABLE. THE A.O. WAS ALSO OF THE VIEW THAT THE CLAIM OF THE ASSESSEE ON ACCOUNT OF SERVICE TAX EXPENSES WAS IN THE NATURE OF PENALTY. THE CIT(A) CONFIRMED THE ACTION OF THE A.O. TAKING A DI FFERENT VIEW THAN THE VIEW TAKEN BY THE A.O. THE CIT(A) NOTED THAT THE ASSESS EE HAD NOT SHOWN THE IMPUGNED SUM PAYABLE IN THE RESPECTIVE A.Y. SO AS T O QUALIFY FOR DEDUCTION UNDER SECTION 234B OF THE ACT. THE CIT(A) FURTHER OBSERV ED THAT THE SERVICE TAX WAS DEPOSITED BY THE ASSESSEE BEING IGNORANT ABOUT THE LAW, AFTER THE SURVEY WAS CONDUCED, THEREFORE, IT IS IN NATURE OF PENALTY AND PENALTY IS NOT ALLOWABLE EXPENSE. 4. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND RECORDS PERUSED. THE CASE OF THE AO IS THAT THE AMOUNT PERTAINED TO EARLIER YEARS WHEREAS THE SUBMISSION OF THE ASSESSEE IS THAT THE LIABILITY WA S DETERMINED ONLY ON 04.03.2008 3 ITA NO.23/AGRA/2013 A.Y. 2008-09 AND THE ASSESSEE HAS DEPOSITED FULL SERVICE TAX UPT O 31.03.2008. THE LD. AUTHORISED REPRESENTATIVE IN THIS REGARD REFERRED PAGE NO.5 OF THE PAPER BOOK TO SHOW THAT THE SERVICE TAX WAS DEPOSITED IN RESPONSE TO A LETTER D ATED 04.03.2008 RECEIVED FROM ASSISTANT COMMISSIONER, KENDRITA UTPAD SULK VA SEVA KAR MASOOS MAHAL, ALIGARH. IT IS ADMITTED FACT THAT THE SERVICE TAX PAID BY TH E ASSESSEE IS BUSINESS EXPENDITURE ALLOWABLE UNDER SECTION 37(1) OF THE ACT. THE OBJE CTION OF THE A.O. WAS THAT IT PERTAINED TO EARLIER YEAR. THIS CONTENTION OF THE A.O. IS NOT SUSTAINABLE AS THE ASSESSEE HAS DEMONSTRATED THAT THE LIABILITY HAS BE EN ACCRUED/DETERMINED ONLY ON 04.03.2008. THE PAYMENT OF SERVICE TAX INCLUDING I NTEREST AND RELATED OTHER AMOUNT CON NOT SAID TO BE PENALTY. THE EXPENSES IN CURRED ARE FOR THE PURPOSE OF BUSINESS, THEREFORE, THE SAME IS ALLOWABLE. THE AS SESSEE HAS DEMONSTRATED THAT THE EXPENSES WERE WHOLLY AND EXCLUSIVELY FOR THE PURPOS E OF BUSINESS. THEREFORE, THE SAME IS ALLOWABLE. EVEN THIS AMOUNT IS ALLOWABLE U NDER SECTION 43B OF THE ACT IN THE YEAR UNDER CONSIDERATION AS AMOUNT IS PAID DURI NG THE YEAR. WE ACCORDINGLY ALLOW THE CLAIM OF THE ASSESSEE AND DELETE THE ADDI TION OF RS.2,84,911/-. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* 4 ITA NO.23/AGRA/2013 A.Y. 2008-09 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY