CARAT MEDIA SERVICES (INDIA) P.LTD, MUMBAI V. ITO 6(2)(1), MUMBAI

ITA 408/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3944 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-08-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 16-01-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANDHIR GUPTE
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI SMC BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, ITA. NO. 408/MUM/2015 (ASSESSMENT YEAR:2007-08) M/S. CARAT MEDIA SERVICES (INDIA) PRIVATE LIMITED, C/O. KALYANIWALLA & MISTRY, ARMY & NAVY BUILDING, 3 RD FLOOR, 148, M. G. ROAD, FORT, MUMBAI 400001 APPELLANT VS. INCOME TAX OFFICER 6(2)(1), MUMBAI RESPONDENT PAN: AAACC6236F /BY APPELLANT : SHRI M. M. GOLWALA WITH SHRI AMAY WAGLE, A.R. /BY RESPONDENT : SHRI RANDHIR GUPTE, D.R. /DATE OF HEARING : 01.08.2016 /DATE OF PRONOUNCEMENT : 04.08.2016 ORDER ITA NO. 408/MUM/15 A.Y. 07-08 [CARAT MEDIA SERVICES (INDIA) PVT. LTD. VS. ITO] PAGE 2 PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-12, MUMBAI, DATED 08.10.2014 FOR A.Y. 2007-08 ON FOLLOW ING GROUNDS: THIS APPEAL IS AGAINST THE ORDER PASSED BY COMMISSIONER OF INCOME-TAX (APPEALS)-12, MUMBAI, U/S.143(3) AND RELATES TO ASSESSMENT YEAR 2007-08. 1) BOTH THE LOWER AUTHORITIES ERRED IN HOLDING THAT SERVICE TAX WAS REQUIRED TO BE TREATED AS A TRADING RECEIPT IN THE CASE OF THE APPELLANT UNDER SECTION 145A RS.30,52,581/-. 2) THE CONTENTION OF THE LOWER AUTHORITIES THAT AN ADDITION OF RS.30,52,581/- IS REQUIRED UNDER THE PROVISIONS OF SECTION 43B IS ERRONEOUS. THE APPELLANT SUBMITS THE CIT(APPEALS) OUGHT TO HAVE DIRECTED THE ASSESSING OFFICER TO DELETE THE SAID ADDITION. 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT DELETING THE ADDITION OF RS.2,60,127/- ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. 2. AT THE OUTSET OF HEARING, LD. AUTHORIZED REPRESE NTATIVE SUBMITTED THAT HE DOES NOT WANT TO PRESS GROUND NO. 3. SO, SAME IS DISMISSED AS NOT PRESSED. 3. THE ONLY ISSUE SURVIVES WITH REGARD TO ADDITION OF RS.30,52,581/-. ASSESSING OFFICER DISALLOWED THE S AID AMOUNT U/S.43B OF THE ACT, WHICH WAS CONFIRMED BY C IT(A). ITA NO. 408/MUM/15 A.Y. 07-08 [CARAT MEDIA SERVICES (INDIA) PVT. LTD. VS. ITO] PAGE 3 4. LD. AUTHORIZED REPRESENTATIVE DREW OUR ATTENTION TO THE FACT THAT AMOUNT IN QUESTION WAS NOT REFLECTED IN PROFIT & LOSS ACCOUNT AS EVIDENT FROM THE PAGE 39 OF PAPER BOOK. IN THIS BACKGROUND, LD. AUTHORIZED REPRESENTATIVE P OINTED OUT THAT THIS ISSUE IS COVERED IN FAVOUR OF ASSESSE E BY THE ORDER OF HONBLE BOMBAY HIGH COURT IN CASE OF CIT V S. M/S. CALIBRE PERSONNEL SERVICES PVT. LTD. IN INCOME TAX APPEAL NO.158 OF 2013 WITH INCOME TAX APPEAL NO.160 OF 201 3, WHEREIN HONBLE BOMBAY HIGH COURT HELD AS UNDER: 8. WE ARE UNABLE TO APPRECIATE THE GRIEVANCE OF TH E REVENUE AS THE DELHI HIGH COURT IN NOBLE & HEWITT P VT. LTD. (SUPRA) HAS CONSIDERED BOTH SECTION 43B OF THE ACT AND ALSO THE ISSUE OF MERCANTILE SYSTEM OF ACCOUNTI NG FOLLOWED BY THE ASSESSEE BEFORE IT. THE REVENUE IS NOT ABLE TO POINT OUT WHY THE DECISION OF DELHI HIGH CO URT REQUIRES RECONSIDERATION. IN OUR VIEW, THE DELHI H IGH COURTS DECISION IN NOBLE & HEWITT PVT. LTD. (SUPRA ) HAS CORRECTLY HELD THAT SECTION 43B OF THE ACT IS A PRO VISION FOR ALLOWING DEDUCTION OF TAX ON PAYMENT BUT THIS C AN ONLY BE TRIGGERED IF DEDUCTION WITH REGARD TO TAXES PAYABLE IS CLAIMED FOR ARRIVING AT TAXABLE INCOME. 4.1 FACTS BEING SIMILAR, SO FOLLOWING SAME REASONIN G, WE HOLD THAT THE PROVISIONS OF SECTION 43B FOR ALLOWIN G DEDUCTION OF PAYMENT ONLY BE TRIGGERED IF DEDUCTION WITH REGARD TO AMOUNT PAYABLE IS CLAIMED FOR ARRIVING AT TAXABLE INCOME. IN CASE BEFORE US, NOTHING HAS BEEN CLAIME D IN PROFIT & LOSS ACCOUNT, SO, FOLLOWING THE REASONING OF CIT VS. M/S. CALIBRE PERSONNEL SERVICES PVT. LTD. (SUPRA), ASSESSING OFFICER IS DIRECTED TO GRANT RELIEF TO ASSESSEE AS PRAYED. ITA NO. 408/MUM/15 A.Y. 07-08 [CARAT MEDIA SERVICES (INDIA) PVT. LTD. VS. ITO] PAGE 4 5. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS P ARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 04 TH DAY OF AUGUST, 2016. SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER MUMBAI: DATED 04/08/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. BY ORDER / , / , ,