Reminder Outdoor Advertising (I) Pvt. Ltd. , Kolkata V. DCIT, CIR-7(1),KOLKATA., Kolkata

ITA 770/KOL/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 5858 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-12-2023
• Assessment Year: 2018-2019
• Appeal Filed On: 25-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 143(1)

Judgement Text

आयकर अपीलीय अधिकरण कोलकाता 'एसएमसी' पीठ, कोलकाता म ें IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA श्री प्रदीप क ु मार चौब े , न्याधयक सदस्य एवं श्री संजय अवस्थी, ल े खा सदस्य क े समक्ष Before PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No.: 770/KOL/2023 Assessment Year: 2018-19 Reminder Outdoor Advertising (India) Pvt. Ltd.........................Appellant [PAN: AAFCR 2272 R] Vs. ADIT, CPC, Bengaluru...........................................................Respondent Appearances: Assessee represented by: Siddharth Agarwal, Adv. Department represented by: Madhumita Dey, Addl. CIT. Date of concluding the hearing : June 11 th , 2024 Date of pronouncing the order : July 10 th , 2024 ORDER Per Sanjay Awasthi, Accountant Member: In this case, the appellant is aggrieved with the order of the Assessing Officer, CPC, Bengaluru (hereinafter referred to as ld. 'AO') who disallowed the claim of payment on account of GST liability to the tune of Rs. 17,58,703/- and employees’ contribution to PF & ESI to the tune of Rs. 83,400/-. Aggrieved with this order, the appellant approached the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as ld. 'CIT(A)'] who I.T.A. No.: 770/KOL/2023 Assessment Year: 2018-19 Reminder Outdoor Advertising (India) Pvt. Ltd. Page 2 of 4 largely relied on the case of Checkmate Services (P.) Ltd. vs. CIT reported in [2022] 448 ITR 518 (SC) to sustain the action of ld. AO. 2. The appellant has before us, raised the following grounds of appeal: “1. For that the Ld. CIT(A) was not justified in confirming the income computed by the A.O. (CPC) at Rs.48,90,804/- under the head Income from business or profession as against Rs. 30,48,701/- as per the return of income furnished by the assessee. 2. For that the Ld. CIT(A) was not justified in confirming the addition of Rs.83,400/-made by the A.O. (CPC) while processing the return u/s. 143(1) on account of delayed deposit of employees’ contribution to PF and ESI though the same were deposited within the due date of filing the Return of Income. 3. For that the Ld. CIT(A) was not justified in confirming the disallowance of Rs. 17,58,703/- made by the A.O. (CPC) while processing the return u/s. 143(1) on account of unpaid GST u/s 43B of the IT Act, 1961. 4. For that the Ld. C1T(A) ought to have considered that impugned addition / adjustment could be made on the instant case while processing the return of income u/s. 143(1). 5. The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.” 2.1. Right at the outset, ld. A/R fairly mentioned that ground no. 2 pertaining to the addition of Rs. 83,400/- could not be justifiably held to be in favour of the assessee and hence, he stated that he would not be pressing the same. In light of this statement, this ground of appeal is dismissed, as not pressed. 3. Regarding the ground pertaining to the disallowance of Rs. 17,58,703/- on account of unpaid GST which allegedly were hit by the provisions of Section 43B of the Act. 3.1. It is seen that the authorities below have relied on the fact that this payment was reflected in the audited accounts and presumably not paid within the time allowed u/s 43B of the Act. I.T.A. No.: 770/KOL/2023 Assessment Year: 2018-19 Reminder Outdoor Advertising (India) Pvt. Ltd. Page 3 of 4 3.2. Before us the AR relied on the decision of the Coordinate Bench of the ITAT, Kolkata in which vide ITA No. 535/KOL/2022 dated 25.07.2023 a similar matter has been dealt with on the basis of the case of CIT vs. Noble & Hewitt (I) (P.) Ltd. reported in [2008] 305 ITR 324 (Delhi) in which it was held that for any disallowance to be made u/s 43B of the Act, the same amount needs to be a part of the profit and loss account. It has been argued before us, with the help of a paper book running into 49 pages, to show that GST is not shown as a part of the profit and loss account, rather an amount of Rs. 51,12,048/- is mentioned as GST payable under “note six-other current liabilities”. 3.3. The ld. D/R was content to rely on the orders of the authorities below. 4. We have considered the rival submissions and also carefully perused the order of ITAT (supra). It is understood that taxes of the kind of GST would normally be part of the total turnover and would not usually be outside of the profit and loss account, but the ld. A/R has demonstrated that there is an entry to the tune of Rs. 51,12,048/- with the narration that it is GST payable. Furthermore, it appears that the ld. CIT(A) has mechanically followed the directives contained in the case of Checkmate Services (P.) Ltd. (supra) and not really appreciated as to how the ratio therein was applicable to the present circumstances. Certain facts before us in the shape of proof of actual payment of GST before the due date of filing return of income cannot be overlooked. Accordingly, we deem it proper to restore this point to the file of ld. CIT(A) for a re-examination from the point of view of applicability of u/s 43B of the Act. This issue is also worth a fresh examination keeping in mind the case of Noble & Hewitt (I) (P.) Ltd. (supra), especially when there appears to be evidence available for payment in the Government account before the due date. 5. Following this discussion, this matter is restored to the file of ld. CIT(A) on the limited ground of verifying whether the GST has been routed through the profit and loss account and whether the whole or part of it has been paid before the due date of filing return. The conclusion on facts should reflect the I.T.A. No.: 770/KOL/2023 Assessment Year: 2018-19 Reminder Outdoor Advertising (India) Pvt. Ltd. Page 4 of 4 interpretation of section 43B of the Act in as much as any sums paid before the due date for filing the return, would be clearly allowable. 6. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 10 th July, 2024. Sd/- Sd/- [Pradip Kumar Choubey] [Sanjay Awasthi] Judicial Member Accountant Member Dated: 10.07.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. Reminder Outdoor Advertising (India) Pvt. Ltd., C/o. Subash Agarwal & Associates, Advocates Siddha Gibson, 1, Gibson Lane, Suite 213, 2 nd Floor, Kolkata, West Bengal, 700069. 2. ADIT, CPC, Bengaluru. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata