MOHD NAYEEM,JHANSI V. ITO WARD 2(3)(5), JHANSI, JHANSI

ITA 51/AGR/2024

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The case involves Mohd. Nayeem, the appellant, contesting an order from the Commissioner of Income Tax (Appeals), which upheld an intimation by the Centralized Processing Center (CPC) disallowing a GST amount of Rs.93.86 Lacs under section 43B of the Income Tax Act. The GST was payable but not paid before the filing of the income tax return for the Assessment Year 2019-20. The appellant argued that since the GST was not routed through the Profit & Loss Account, it should not be disallowed under section 43B. However, the CIT(A) and the Tribunal rejected this argument, emphasizing that the GST component must be included in the turnover as per Section 145 and ICDS, regardless of the accounting method used (exclusive or inclusive). The Tribunal also noted that the adjustment could be made under section 143(1) as it was based on the Tax Auditor's report.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 473833 (ITAT-AGRA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2019-2020
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHAILENDRA SHRIVASTAVA LD.
• Assessee Lawyers: S MANOJ GOYAL; NITIN GOYAL
• Section: 143(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “DB” BENCH, AGRA BEFORE HON’BLE SHRI SATBEER SINGH GODARA, JM AND HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपील सं. / ITA No.51/Agr/2024 (िनधाŊरणवषŊ / Assessment Year: 2019-20) Mohd. Nayeem 74, Sadar Bazarm Jhansi UP – 284001 बनाम/ Vs. ITO Ward 2(3)(5) Jhansi ̾थायीलेखासं./जीआइआरसं./PAN/GIR No. ACFPN-3382-F (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) अपीलाथŎकीओरसे/ Appellant by : S/Shri Manoj Goyal & Nitin Goyal (Advocate) – Ld. ARs ŮȑथŎकीओरसे/Respondent by : Shri Shailendra Shrivastava – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 19-02-2025 घोषणाकीतारीख /Date of Pronouncement : 28-03-2025 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2019-20 arises out of an order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 19-12- 2023 in the matter of an intimation issued by CPC u/s 143(1) on 14-07- 2020. The sole grievance of the assessee is disallowance of Rs.93.86 Lacs u/s 43B. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. 2. The CPC, while processing the return of income, as reported by Tax Auditor, made impugned disallowance u/s 43B. The impugned 2 disallowance represents GST payable but not paid before filing of income tax return. The assessee stated that the same was not routed through Profit & Loss Account and therefore, the same could not be disallowed u/s 43B. The Ld. CIT)(A) rejected the same on the ground that ICDS and Sec.145 mandate the assessee to include this component in the turnover. Aggrieved, the assessee is in further appeal before us. 3. From the facts, it could be ascertained that the assessee is following exclusive method for GST accounting. Another method to account the same is inclusive method wherein GST components are routed through Profit & Loss Account. Whatever method is followed by the assessee, the same would not have any impact on the final profit / loss for the year. Both methods are recognized method of accounting. However, the assessee following inclusive method and the assessee following exclusive method could not be treated differently for the purpose of disallowance u/s 43B. The provisions of Sec.145 and ICDS mandate inclusion of this component to turnover. Accordingly, the argument that the expenditure was not routed through Profit & Loss account could not be accepted. This adjustment could very well be made u/s 143(1) since the same emanates from reporting made by Tax Auditor. Therefore, the adjudication of Ld. CIT(A) could not be faulted with. 4. The Ld. AR has made alternative submissions that the deduction thereof should be allowed to the assessee in the year of payment. It would suffice on our part to observe that the assessee is free to claim this deduction in accordance with law which Ld. AO can verify in appropriate proceedings. 3 5. The appeal stands partly allowed to the extent as indicated in the order. Order pronounced u/r 34(4) of Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (SATBEER SINGH GODARA) (MANOJ KUMAR AGGARWAL) Ɋाियक सद˟ /JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER Dated: 28-03-2025 आदेश की Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT 4. िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF ASSISTANT REGISTRAR ITAT AGRA "