THE DCIT, CIRCLE - 1, Kakinada V. M/s Sudha Agro Oils and Chemical Industries Ltds, Samalkot

ITA 449/VIZ/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2082 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Keywords: Revenue expenditure
• Section: 43B; 28

Judgement Text

ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.449/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) DCIT , CIRCLE - 1 , KAKINADA VS. M/S. SUDHA AGRO OIL & CHEMICAL INDUSTRIES LTD. KAKINADA [PAN: AADCS 1177N ] ( / APPELLANT) ( / RESPONDENT) ./I.T.A.NO.471/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) M/S. SUDHA AGRO OI L & CHEMICAL INDUSTRIES LTD. KAKINADA VS. DCIT , CIRCLE - 1 , KAKINADA ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SMT. D. KOMALI KRISHNA, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 04.02.2016 / DATE OF PRONOUNCEMENT : 11.02.2016 ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 2 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THESE CROSS APPEALS FILED BY THE REVENUE, AS WELL AS ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A)-11, MUMBAI, CA MP AT VISAKHAPATNAM AND IT PERTAINS TO THE ASSESSMENT YEA R 2009-10. SINCE, THE ISSUES INVOLVED IN THESE APPEALS ARE COMMON, TH EY ARE CLUBBED, HEARD TOGETHER AND DISPOSED OFF BY WAY OF THIS COMM ON ORDER, FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A LIMITED COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF MANUFA CTURE AND SALE OF RICE BRAN OIL, REFINED OIL, STERIC ACID, OXYGEN GAS HYDROGENATED RB OIL, GLYCERIN AND GENERATION OF POWER, ETC. THE ASSESSE E HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 29.9.2 009 DECLARING A TOTAL INCOME OF RS.1,28,01,700/-. THE CASE WAS SELE CTED FOR SCRUTINY UNDER CASS AND ACCORDINGLY, NOTICES U/S 143(2) & 14 2(1) OF THE INCOME- TAX, 1961 (HEREINAFTER CALLED AS THE ACT) WERE IS SUED. IN RESPONSE TO NOTICE, AUTHORIZED REPRESENTATIVE OF THE ASSESSEE A PPEARED FROM TIME TO TIME AND FURNISHED BOOKS OF ACCOUNTS AND OTHER INFO RMATION CALLED FOR. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A. O. NOTICED THAT ASSESSEE HAS ADMITTED OTHER INCOME OF RS.1,61,49,49 7/- TOWARDS ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 3 ESCALATION CHARGES RECEIVED FROM CHATTISGARH STATE ELECTRICITY BOARD (CSEB), THEREFORE, ISSUED A NOTICE AND ASKED TO FUR NISH THE NATURE OF INCOME OFFERED UNDER THE HEAD ESCALATION CHARGES. THE ASSESSEE, IN REPLY TO THE NOTICE, SUBMITTED THAT DURING THE PREV IOUS YEAR RELEVANT TO ASSESSMENT YEAR 2009-10, IT HAS RECEIVED A SUM OF R S.1,61,49,497/- FROM CSEB TOWARDS ESCALATION CHARGES OF ELECTRICITY . THE ASSESSEE FURTHER, SUBMITTED THAT THE CHATTISGARH STATE ELECT RICITY REGULATORY COMMISSION HAS PASSED AN ORDER ON 15.1.2008 ENHANCI NG THE SALE PRICE OF POWER AND ACCORDINGLY AWARDED AN AMOUNT OF RS.3, 34,41,482/- FOR THE FINANCIAL YEARS 2006-07 & 2007-08. THE CSEB HA S FILED AN APPEAL BEFORE THE APPELLATE TRIBUNAL FOR ELECTRICITY, NEW DELHI AGAINST THE ORDER OF ELECTRICITY REGULATORY COMMISSION AND CHALLENGED THE ORDER. THE APPELLATE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE ON 6.11.2009 CONFIRMING THE COMMISSIONS ORDER. THE C SEB, CONSEQUENT TO APPELLATE AUTHORITY ORDER, HAS RELEASED THE AMOUNT IN THE FINANCIAL YEAR 2008-09 RELEVANT TO ASSESSMENT YEAR 2009-10. THE A SSESSEE BEING A COMPANY FOLLOWING THE PRINCIPLES OF PRUDENCE HAD NO T RECOGNIZED THE INCOME FOR THE FINANCIAL YEAR 2007-08, AS THE RECOV ERABILITY OF WHICH WAS IN DOUBT. AS SOON THE TRIBUNAL PASSED FINAL ORDER, THE CSEB HAS PAID THE AMOUNT, THEREFORE, THE ASSESSEE HAS RECOGNIZED THE INCOME IN THE YEAR IN WHICH THE AMOUNT WAS RECEIVED. THE ASSESSE E FURTHER SUBMITTED ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 4 THAT THOUGH IT HAS OFFERED THE SAID INCOME IN THE F INANCIAL YEAR 2008-09 RELEVANT TO ASSESSMENT YEAR 2009-10, THE SAME WAS A LREADY BEEN TAXED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 20 08-09, RESULTING A DOUBLE ADDITION FOR THE SAME INCOME IN TWO FINANCIA L YEARS. THEREFORE, REQUESTED TO EXCLUDE THE INCOME ADMITTED FOR THE CU RRENT YEAR AND TO THIS EFFECT, FILED A REVISED STATEMENT OF TOTAL INC OME EXCLUDING THE AMOUNT RECEIVED FROM THE ELECTRICITY BOARD. THE AS SESSEE FURTHER SUBMITTED THAT IT HAS PREFERRED AN APPEAL BEFORE TH E CIT(A) FOR THE ASSESSMENT YEAR 2008-09 AND THE APPEAL IS PENDING F OR ADJUDICATION AT THE FIRST APPELLATE AUTHORITY, THEREFORE ANY ADDITI ON IN THE CURRENT YEAR PURELY DEPENDS UPON THE OUTCOME OF APPEAL OF ASSESS MENT YEAR 2008- 09. THE A.O. AFTER CONSIDERING THE EXPLANATIONS OFF ERED BY THE ASSESSEE, REJECTED THE REVISED STATEMENT OF TOTAL INCOME FILE D BY THE ASSESSEE AND ACCEPTED THE ORIGINAL STATEMENT OF TOTAL INCOME FIL ED ALONG WITH THE RETURN OF INCOME. THE A.O. FURTHER HELD THAT THOUGH ASSESSEE HAS OFFERED THE INCOME FOR THE ASSESSMENT YEAR 2009-10 AND ALSO THE FACT THAT THE SAME INCOME WAS TAXED FOR THE ASSESSMENT Y EAR 2008-09, THE ISSUE IS BEFORE CIT(A) AND CIT(A) HAS NOT PASSED AN Y ORDER, THEREFORE, REJECTED THE REVISED STATEMENT OF TOTAL INCOME AND COMPLETED THE ASSESSMENT BASED ON ASSESSEE ADMISSION. SINCE, ASSE SSE ITSELF CREDITED THE INCOME IN THE BOOKS OF ACCOUNT, NO SEPARATE ADD ITION IS MADE. ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 5 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE A SSESSEE REITERATED THE SUBMISSION MADE BEFORE THE A.O. THE ASSESSEE F URTHER SUBMITTED THAT IT HAS OFFERED THE INCOME FOR THE ASSESSMENT Y EAR 2009-10, WHEREAS THE DEPARTMENT HAS TAXED THE SAME INCOME FO R ASSESSMENT YEAR 2008-09, THEREBY THERE WAS A DOUBLE TAXATION F OR THE SAME AMOUNT IN TWO FINANCIAL YEARS, WHICH CANNOT BE DONE. THE CIT(A) AFTER CONSIDERING THE EXPLANATIONS OFFERED BY THE ASSESSE E SET ASIDE THE ISSUE TO THE FILE OF THE A.O. WITH A DIRECTION THAT IN CA SE, THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 ON THI S ACCOUNT WAS DISMISSED, THE A.O. IS DIRECTED TO ALLOW THE RELIEF FOR THE ASSESSMENT YEAR 2009-10. IN CASE, RELIEF IS ALLOWED IN ASSESS MENT YEAR 2008-09, THEN NO RELIEF SHALL BE ALLOWED FOR THE ASSESSMENT YEAR 2009-10. AGGRIEVED BY THE CIT(A) ORDER, THE REVENUE IS IN AP PEAL BEFORE US. 4. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIA LS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2009-10, ASSESSEE HAS RECEIVED POWER ESCALATION CHARGES FROM CSEB. THE A SSESSEE HAS OFFERED THE SAME AS INCOME OF THE YEAR ON RECEIPT B ASIS. THE DEPARTMENT HAS TAKEN A VIEW THAT THE SAID AMOUNT IS TAXABLE ON ACCRUAL ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 6 BASIS, THEREFORE, MADE ADDITIONS FOR THE ASSESSMENT YEAR 2008-09. THE ASSESSEE CONTENTION IS THAT SINCE, THE DEPARTMENT H AS ALREADY TAXED THE INCOME FOR THE ASSESSMENT YEAR 2008-09, SAME SHOULD BE EXCLUDED FOR THE ASSESSMENT YEAR 2009-10, OTHERWISE IT AMOUNTS T O DOUBLE TAXATION. THE A.O. REJECTED THE CLAIM OF THE ASSESSEE AND PRO CEEDED TO ASSESS THE INCOME AS ADMITTED BY THE ASSESSEE AS PER THE STATE MENT OF TOTAL INCOME FILED ALONG WITH RETURN OF INCOME. THE CIT( A) AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, HELD THAT IT IS SETTLED PRINCIPLES OF LAW THAT THERE CANNOT BE DOUBLE TAXATION OF ANY INCOME AND SET ASIDE THE ISSUE TO THE FILE OF THE A.O. WITH A DIRECTION TO CONSIDER THE ASSESSEES SUBMISSIONS. IN CASE THE APPEAL OF THE A SSESSEE FOR THE ASSESSMENT YEAR 2008-09 IS DISMISSED, THEN THE RELI EF SHOULD BE ALLOWED FOR ASSESSMENT YEAR 2009-10. IN CASE, THE APPEAL O F THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 IS ALLOWED IN FAVOUR OF THE ASSESSEE, THEN NO RELIEF SHOULD BE GIVEN FOR THE ASSESSMENT YEAR 2 009-10. THE SUM AND SUBSTANCE OF THE CIT(A)S ORDER IS THAT THE INC OME IS TAXABLE EITHER FOR THE ASSESSMENT YEAR 2008-09 OR FOR THE ASSESSME NT YEAR 2009-10 AND IT CANNOT BE TAXED FOR BOTH THE ASSESSMENT YEAR S. WE CONCURRED WITH THE DECISION TAKEN BY THE CIT(A). IT IS SETTLE D PROPOSITION OF LAW THAT NO INCOME SHALL BE TAXED TWICE. IN THE PRESENT CASE ON HAND, THE A.O. HAS ACCEPTED THAT THE INCOME HAS BEEN TAXED BY THE DEPARTMENT ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 7 FOR THE ASSESSMENT YEAR 2008-09. AS RIGHTLY CONTEND ED BY THE ASSESSEE IT CAN BE TAXED EITHER FOR THE A.Y. 2008-09 OR 2009 -10 AND IT CANNOT BE TAXED FOR BOTH THE YEARS. THEREFORE, WE ARE OF THE OPINION THAT, THE CIT(A) HAS RIGHTLY SET ASIDE THE ISSUE TO THE FILE OF THE A.O. WITH THE ABOVE DIRECTION. WE DO NOT FIND ANY ERROR OR INFIRM ITY IN THE ORDER PASSED BY THE CIT(A) AND HENCE, WE INCLINED TO UPHO LD THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. ITA 471/VIZAG/203: 5. THE ONLY ISSUE, EMANATES FROM THE ASSESSEE APPEA L IS WHETHER A.O. WAS RIGHT IN DISALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE TOWARDS SALES TAX AND SERVICE TAX ON PAYMENT BASIS. THE BRIEF FACTS OF THE ISSUE ARE THAT THE ASSESSEE HAS MADE PAYMENT OF RS.21,59,515/- TOWARDS CST AND SERVICE TAX UNDER PROTEST AND CLAIM ED THE DEDUCTION U/S 43B OF THE ACT, WHILE COMPUTING THE INCOME FROM BUSINESS. THE A.O. DISALLOWED THE AMOUNT U/S 43B OF THE ACT, BY S TATING THAT THE ASSESSEE HAS NOT ADMITTED THE LIABILITY, THEREFORE, THE AMOUNT IS NOT ALLOWABLE U/S 43B OF THE ACT. THE CIT(A) UPHOLDING THE ORDER OF THE A.O., HELD THAT WHEN THE LIABILITY IS NOT CRYSTALLI ZED DURING THE YEAR UNDER CONSIDERATION, THE QUESTION OF CLAIMING DEDUCTION U /S 43B OF THE ACT WAS NOT CORRECT. ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 8 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIA LS AVAILABLE ON RECORD. THE A.O. DISALLOWED CST AND SERVICE TAX PA ID UNDER PROTEST FOR THE REASON THAT THE ASSESSEE ITSELF HAS NOT ADMITTE D THE LIABILITY IN THE BOOKS OF ACCOUNTS. THE ASSESSEE HAS PAID CST AND SE RVICE TAX UNDER PROTEST CHALLENGING THE ORDER OF THE AUTHORITIES BE FORE THE APPELLATE AUTHORITIES. THE A.O. WAS OF THE OPINION THAT THE A SSESSEE HAS NOT ACCEPTED THE LIABILITY AND NOT RECOGNIZED IN THE BO OKS OF ACCOUNT, THEREFORE, THE SAME IS NOT QUALIFIED TO BE CLAIMED AS EXPENDITURE. ONCE, THE EXPENDITURE IS NOT QUALIFIED TO BE DEDUCTIBLE, THEN, NO DEDUCTION IS ALLOWED UNDER SECTION 43B OF THE ACT. IT WAS THE CO NTENTION OF THE ASSESSEE THAT IT HAS PAID THE AMOUNT, THEREFORE, EL IGIBLE FOR DEDUCTION U/S 43B OF THE ACT. WHETHER THE LIABILITY WAS PAID WITHOUT ANY CONDITION OR WITH PROTEST, IT DOES NOT CHANGE THE CHARACTERIS TICS OF THE EXPENDITURE. 7. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIE S BELOW AND ALSO SUBMISSIONS OF THE ASSESSEE. BEFORE WE PROCEE D INTO THE FACTS OF THE ISSUE, LET US UNDERSTAND THE PROVISIONS OF SECT ION 43B OF THE ACT. THE PROVISION OF SECTION 43B OF THE ACT READS AS UN DER: CERTAIN DEDUCTIONS TO BE ONLY ON ACTUAL PAYMENT . NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PRO VISION OF THIS ACT, A DEDUCTION OTHERWISE ALLOWABLE UNDER THIS ACT IN RES PECT OF ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 9 [(A) ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY, CESS OR FEE, BY WHATEVER NAME CALLED, UNDER ANY LAW FOR THE TIME BE ING IN FORCE, OR] (B) ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER BY WAY OF CONTRIBUTION TO ANY PROVIDENT FUND OR SUPERANNUATION FUND OR GRA TUITY FUND OR ANY OTHER FUND FOR THE WELFARE OF EMPLOYEES, [OR] (C) ANY SUM REFERRED TO IN CLAUSE (II) OF SUB-SECT ION (1) OF SECTION 36] [OR] [(D) ANY SUM PAYABLE BY THE ASSESSEE AS INTEREST ON ANY LOAN OR BORROWING FROM ANY PUBLIC FINANCIAL INSTITUTION [OR A STATE F INANCIAL CORPORATION OR A STATE INDUSTRIAL INVESTMENT CORPORATION], IN ACCORDANCE W ITH THE TERMS AND CONDITIONS OF THE AGREEMENT GOVERNING SUCH LOAN OR BORROWING. [,OR] [(E) ANY SUM PAYABLE BY THE ASSESSEE AS INTEREST ON ANY [LOAN OR ADVANCES] FROM A SCHEDULED BANK IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THE AGREEMENT GOVERNING SUCH LOAN [OR ADVANCES],] [OR] (F) ANY SUM PAYABLE BY THE ASSESSEE AS AN EMPLOYER IN LIEU OF ANY LEAVE AT THE CREDIT OF HIS EMPLOYEE,] SHALL BE ALLOWED (IRRESPECTIVE OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SUM WAS INCURRED BY THE ASSESSEE ACCORDING TO THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY HIM) ONLY IN COMPU TING THE INCOME REFERRED TO IN SECTION 28 OF THAT PREVIOUS YEAR IN WHICH SUC H SUM IS ACTUALLY PAID BY HIM 8. FROM THE PLAIN READING OF SECTION 43B OF THE ACT , IT IS CLEAR THAT ANY SUM PAYABLE BY THE ASSESSEE BY WAY OF TAX, DUTY , CESS OR FEE BY WHATEVER NAME CALLED, UNDER ANY LAW FOR THE TIME BE ING IN FORCE, SHALL BE ALLOWED ONLY IN COMPUTING THE INCOME REFERRED TO IN SECTION 28 OF THAT PREVIOUS YEAR IN WHICH SUCH SUM IS ACTUALLY PA ID BY HIM. THEREFORE, IT IS CLEAR THAT AS PER SECTION 43B OF THE ACT, ANY SUM TAX OR DUTY IS DEDUCTIBLE ON PAYMENT BASIS, IRRESPECTIVE OF THE FA CT THAT WHETHER IT WAS INCURRED IN THE PREVIOUS YEAR OR NOT. ONCE ASSESSE E PAID THE AMOUNT, THE YEAR IN WHICH SUCH PAYMENT IS MADE IS RELEVANT FOR CLAIMING THE DEDUCTION AND THE YEAR IN WHICH SUCH LIABILITY WAS INCURRED BY THE ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 10 ASSESSEE WAS IRRELEVANT. IN THE PRESENT CASE ON HAN D, THOUGH THE ASSESSEE PAID THE TAX UNDER PROTEST, THE ACTUAL PAY MENT IS MADE DURING THE FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR 2009 -10. THE A.O. HAS MISINTERPRETED THE PROVISIONS OF SECTION 43B, BY ST ATING THAT THE DEDUCTION IS AVAILABLE, ONLY WHEN SUCH LIABILITY WA S DEBITED TO PROFIT & LOSS ACCOUNT. THEREFORE, WE ARE OF THE OPINION THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION FOR THE CST AND SERVICE TAX PAID ON ACTUAL PAYMENT BASIS U/S 43B OF THE ACT, WHETHER IT WAS PAID UNDER PROTEST OR OTHERWISE. 9. NOW IT IS PERTINENT TO MENTION HERE TO CASE LAW RELIED UPON BY THE ASSESSEE. THE ASSESSEE RELIED UPON ITAT, MUMBAI BE NCH DECISION IN THE CASE OF EURO RSCG ADVERTISING (P) LTD. VS. ACIT (20 13) 154 TTJ 389. THE ITAT UNDER SIMILAR CIRCUMSTANCES, HELD THE ISSU E IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION IS REPRODUCED HEREU NDER: DEDUCTION U/S 43BA1LOWABILITY RELEVANCY OF YEAR OF PAYMENT ASSESSEE COMPANY ENGAGED IN RENDERING RANGE OF COMM UNICATIONS SERVICES INCLUDING ADVERTISING, SALES PROMOTION, RE CEIVED CREATIVE FEE FOR CREATION OF ADVERTISEMENT AND COMMISSION FOR PL ACEMENT OF ADVERTISEMENT IN MEDIA FROM CUSTOMERS AND HAD GOT R EGISTERED ITSELF FOR PAYMENT OF SERVICE TAX UNDER THE CATEGORY ADVER TISING AGENCY SERVICES ASSESSEE HAD PAID SERVICE TAX ONLY ON THE INCOME FROM CREATION OF ADVERTISEMENT AND COMMISSION RECEIVED F ROM CUSTOMERS FOR PLACEMENT OF ADVERTISEMENTS IN MEDIAHOWEVER, IT HAD NOT PAID SERVICE TAX ON RENEGOTIATED PRICESA SURVEY WA S CARRIED OUT BY SERVICE TAX AUTHORITIES WHO ISSUED SHOW CAUSE NOTIC E TO THE ASSESSEE FOR NOT PAYING SERVICE TAX ON SUCH SERVICESASSESSE E IN ORDER TO BUY PEACE AND TO AVOID FURTHER LITIGATION, DEPOSITED IT S SERVICE TAX LIABILITY ALONG WITH INTEREST FOR EARLIER ASSESSMENT YEARS AN D CLAIMED DEDUCTION OF SAME AS REVENUE EXPENDITURE UNDER S 37 (1)AO AND CIT(A) HELD THAT AMOUNT OF SERVICE TAX AND INTEREST PAID WAS A ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 11 LIABILITY WHICH WAS NOT CRYSTALLIZED DURING THE YEA R IN ABSENCE OF ANY FORMAL WRITTEN AGREEMENT, SAME CANNOT BE ALLOWED AS DEDUCTION IN THE CURRENT YEAR EITHER UNDER S 37 OR UNDER S 43BHE1D, DEDUCTION CLAIMED BY ASSESSEE IN RESPECT OF ANY SUM PAID BY W AY OF TAX, DUTY, CESS, OR FEE, SHALL BE ALLOWED ONLY IN COMPUTING TH E INCOME REFERRED TO IN S 28 OF THAT PREVIOUS YEAR IN WHICH SUCH SUM IS ACTUAL PAID BY HIMYEAR IN WHICH ASSESSEE INCURRED LIABILITY TO PA Y SUCH TAX, DUTY ETC., HAS NO RELEVANCE AND CANNOT BE LINKED IN THE MATTER OF GIVING BENEFIT OF DEDUCTION UNDER S 43BTHUS AMOUNT OF SER VICE TAX ALONG WITH INTEREST PAID BY THE ASSESSEE IS ALLOWABLE U/S 43B. 10. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO APPLYING THE RATIO OF THE COORDINATE BENCH DECISION MENTIONED ABOVE, WE ARE OF THE OPINION THAT CST AND SERVICE TAX PAID UN DER PROTEST IS DEDUCTIBLE IN THE YEAR IN WHICH SUCH LIABILITY WAS PAID U/S 43B OF THE ACT, IRRESPECTIVE OF WHETHER SUCH LIABILITY WAS INCURRED IN ANY PREVIOUS YEAR. THEREFORE, WE DIRECT THE A.O. TO DELETE THE ADDITIO NS MADE U/S 43B OF THE ACT. 11. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 11 TH FEB16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 11.02.2016 VG/SPS ITA NOS.449&471/VIZAG/2013 M/S. SUDHA AGRO OILS AND CHEMICAL INDUSTRIES LTD. 12 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE DCIT, CIRCLE-1, KAKINADA 2. / THE RESPONDENT M/S. SUDHA AGRO OILS AND CHEMIC AL INDUSTRIES LTD., 19-1-422, G. RAMAGMPETA, SAMALKOT. 3. + / THE CIT, RAJAHMUNDRY 4. + ( ) / THE CIT (A), VISAKHAPATNAM 5. THE PRINCIPAL CIT-2, VISAKHAPATNAM 6. THE CHIEF CIT-III, MUMBAI. 7. # . , . , # / DR, ITAT, VISAKHAPATNAM 8 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM