INAYAT PEERMOHAMMAD SHAIKH, MUMBAI V. ITO 19(3)(2), MUMBAI

ITA 4104/MUM/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3238 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 29-12-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 02-07-2015
• Court: TRIBUNAL
• Section: 43B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL I , BENCH MUMBAI BEFORE SHRI R.C.SHARMA , A M & SHRI AMARJIT SINGH , J M ./ ITA NO. 4104 / MUM/20 1 5 ( / ASSESSMENT YEAR : 20 1 1 - 1 2 ) MR. INAYATULLAH PEER MOHAMMAD SHAIKH, C/O MOHAN SRIHARSHA & ASSOCIATES, CHARTERED ACCOUNTANTS, 302 B WING, MANGALYA, OFF MAROL MAROSHI ROAD, NEAR MAROL FIRE BRIGADE, ANDHERI (EAST), MUMBAI - 400059 VS. ITO - 19(3)(2), MUMBAI ./ ./ P AN/GIR NO. : A LEPS 9159 H ( / APPELLANT ) .. ( / RESPONDENT ) AND ./ ITA NO. 2276/ MUM/20 14 ( / ASSESSMENT YEAR :20 09 - 1 0 ) MR. INAYAT PEER M OHAMMAD SHAIKH, C/O MOHAN SRIHARSHA & ASSOCIATES, CHARTERED ACCOUNTANTS, 302 B WING, MANGALYA, OFF MAROL MAROSHI ROAD, NEAR MAROL FIRE BRIGADE, ANDHERI (EAST), MUMBAI - 400059 VS. ITO - 19(3)(2), MUMBAI ./ ./ PAN/GIR NO. : A LEPS 9159 H ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI NISHIT GANDHI /REVENUE BY : SHRI SANTOSH MANKOSKAR / DATE OF HEARING : 01/0 2/201 6 / DATE OF PRONOUNCEMENT : 31/03 /2016 / O R D E R PER R.C.SHARMA ( A .M.) : TH E SE ARE THE APPEAL S FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), MUMBAI, FOR THE ASSESSMENT YEAR S 201 1 - 1 2 & 2009 - 10 , IN THE MATTER OF ORDER PASSED U/S.143(3) OF THE I.T. ACT. ITA NO. 410 /20 1 5 & ITA NO2276/2014 2 2 . THE ONLY GRIEVANCE OF THE ASSESSEE PERTAINS TO THE ADDITION OF OUTSTANDIN G LIABILITY OF VAT AND SERVICE TAX U/S.43B OF THE IT ACT. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. DURING THE COURSE OF SCRUTINY ASSESSMENT THE AO MADE ADDITION ON ACCOUNT OF VAT AND SERVICE TAX NOT PAID DURING THE YEAR BY INVOKING PROVIS IONS OF SECTION 43B F THE ACT. WE FOUND THAT PROVISION OF SECTION 43B IS APPLICABLE ONLY WITH RESPECT TO THE EXPENDITURE WHICH HAS BEEN DEBITED AND CLAIMED WITHOUT PAYMENT OF THE SAME. IN THE INSTANT CASE BEFORE US, THE ASSESSEE IS NEITHER DEBITED VAT OR S ERVICE TAX NOR CLAIMED THE SAME AS DEDUCTION WHILE COMPUTING ITS INCOME. THEREFORE, THERE IS NO REASON FOR MAKING ADDITION ON VAT OR SERVICE TAX WHICH HAS NOT BEEN CLAIMED AS EXPENDITURE IN THE P&L ACCOUNT. THE VAT AND SERVICE TAX SO COLLECTED FROM THE CUS TOMERS ARE NEITHER IN THE NATURE OF INCOME NOR EXPENSES, INSOFAR AS THE TAX SO COLLECTED ARE DIRECTLY PAID IN THE GOVERNMENT TREASURY AND ASS ESSEE IS NOT GOING TO EARN ANY INCOME FROM SUCH TAX COLLECTED FROM THE CUSTOMERS. SINCE THE ASSESSEE DID NOT DEBIT VAT AND SERVICE TAX IN THE PROFIT AND LOSS ACCOUNT NOR DID THE ASSESSEE CLAIMED ANY DEDUCTION IN RESPECT OF VAT AND SERVICE TAX AMOUNT WHI LE COMPUTING HIS TAXABLE INCOME , T HE ISSUE IS SQUARELY COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF NOBLE & HEWITT (INDIA) (P) LTD., 305 ITR 324. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF PHARMA SEARCH, 82 DTR 303 ALSO HELD THAT PROVISIONS OF SECTION 43B CANNOT BE INVOKED UNLESS THE ASSESSEE HAS CLAIMED BY WAY DEDUCTION THE AMOUNTS SPECIFIED U/ S.43B WITHOUT ITA NO. 410 /20 1 5 & ITA NO2276/2014 3 MAKING ACTUAL PAYMENT. RESPECTFULLY FOLLOWING THE DECISION OF HON BLE DELHI HIGH COURT AS WELL AS DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL, WE DO NOT FIND ANY JUSTIFICATION FOR ADDITION SO MADE BY THE AO. ACCORDINGLY, THE AO IS DIRECTED T O DELETE THE ADDITION SO MADE IN THE ASSESSMENT YEAR 2009 - 2010 AND 2011 - 2012 ON ACCOUNT OF VAT AND SERVICE TAX NOT CLAIMED IN THE PROFIT AND LOSS ACCOUNT. 4 . IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON T HIS 31/03 /2016 SD/ - SD/ - ( AMARJIT SINGH ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 31/03 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER , / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE R ESPONDENT. 3. ( ) / THE CIT(A) , MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//