SOFTWARE ASSOCIATES INFORMATION TECHNOLOGIES PRIVATE LTD,KOZHIKODE V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), KOZHIKODE

ITA 933/COCH/2024

AI Insights

The case involves Software Associates Information Technology P. Ltd., which appealed against the order of the National Faceless Appeal Centre (NFAC), Delhi, for the Assessment Year 2020-21. The appellant, engaged in computer software engineering, initially filed a return disclosing a total income and later revised it to declare a loss. The AO made an addition to the income on account of service tax paid, which was considered not pertaining to the year under consideration. The CIT(A) upheld the AO's decision, leading to the current appeal. The Tribunal, after hearing the Senior Departmental Representative and in the absence of the appellant, decided to remand the matter back to the AO for further verification regarding the service tax deduction claimed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23460 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2020-2021
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Keywords: Set aside
• Section: 143(3); 43B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 933/Coch/2024 Assessment Year: 2020-21 Software Associates Informaton .......... Appellant Technology P. Ltd. 3/962, MASCOT, Zilla Bungalow Road Nadakkav, Kozhikode 673011 [PAN: AAHCS2614J] vs. Asst. Commissioner of Income Tax .......... Respondent Circle - 1(1), Kozhikode Appellant by: ------- None ------- Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 04.02.2025 Date of Pronouncement: 10.02.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 30.09.2024 for Assessment Year (AY) 2020-21. 2. Brief facts of the case are that the appellant is a company incorporated under the provisions of Companies Act, 1956. It is engaged in the business of computer software engineering. The return of income for AY 2020-21 was filed on 31.03.2021 disclosing total income of Rs. 13,20,600/-. The same was revised on 28.05.2021 declaring a loss of Rs. 20,66,887/-. Against the said return of income, the assessment was 2 ITA No. 933/Coch/2024 Software Associates Informaton Technology P. Ltd. completed by the ACIT, Circle 1(1), Kozhikode (hereinafter called \"the AO\") vide order dated 16.09.2022 assed u/s. 143(3) r.w.s. 144B of the Income Tax Act, 1961 (the Act) at a total income of Rs. 13,09,223/-. While doing so, the AO made addition on account of service tax paid of Rs. 33,76,110/- made in the original return of income. The AO was of the opinion that the service tax paid does not pertain to the year under consideration. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO for the failure of the appellant to prove that service tax was claimed as deduction was debited to Profit & Loss A/c. 4. Being aggrieved, the appellant is in appeal before us in the present appeal. 5. When the appeal was called nobody appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceeded to dispose of the appeal after hearing the learned Sr. DR. 6. The issue in the present appeal relates to the deductibility of service charge paid under the Vivad Se Vishwas Scheme, 2024. No doubt, the claim for deduction of service tax is governed by the provisions of section 43B of the Act. From the material on record it is not clear whether these expenditures were claimed as deduction in the earlier year on accrual basis and addition was made invoking provisions of section 43B for nonpayment. In any event, expenditure on service tax is allowable on payment basis and the same is 3 ITA No. 933/Coch/2024 Software Associates Informaton Technology P. Ltd. covered by provisions of section 43B of the Act. Therefore, the matter is set aside to the file of the AO for verification whether it had claimed any deduction in the earlier years and disallowed the deduction for non-payment of service tax. The matter is remand back to the file of the AO to decide the appeal in accordance with law after affording reasonable opportunity of hearing to the appellant. 7. In the result, the appeal filed by the assessee stands allowed for statistical purposes. 8. Order pronounced in the open court on 10th February, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 10th February, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "