2021 (7) TMI 276 - AT - Income Tax

Addition in respect of Service Tax paid wherein CENVAT credit could not be availed - addition in respect of various expenses incurred under the head Other Minor Miscellaneous Advances Written Off - CIT(A) deleted the addition made on account of discount written off and confirmed the service tax which could not be claimed as CENVAT - CIT(A) also confirmed the addition in respect of Other Minor Miscellaneous Advances Written Off - HELD THAT - We deem it proper in the interest of justice to restore the issue related to impugned additions in respect of service tax paid and other minor miscellaneous advances written off to the file of the Assessing Officer to decide it in accordance with law after verifying the claim of the assessee as stated in the written submissions. Thus, grounds raised by the assessee in this appeal are allowed for statistical purposes.

Summary

Issues:
1. Disallowance of Service Tax paid where CENVAT credit could not be availed.
2. Disallowance of expenses under the head "Other Minor Miscellaneous Advances Written Off."

Analysis:
1. The appeal was filed against the order of the CIT(A) sustaining the addition of Service Tax paid in a sum of ?11,97,876 where CENVAT credit could not be availed. The Assessing Officer had assessed the income against the returned income at NIL, directing that the assessee had paid taxes under MAT credit. The CIT(A) partly allowed the appeal, deleting the addition made on account of discount written off but confirming the disallowance of Service Tax and other minor advances written off. The Tribunal considered the submissions and decided to restore the issue to the Assessing Officer for verification, allowing the appeal for statistical purposes.

2. The second issue pertained to the disallowance of various expenses incurred under the head "Other Minor Miscellaneous Advances Written Off." The CIT(A) confirmed the addition of ?2,94,025 in this regard. The assessee sought directions for the Assessing Officer to examine the details and allow the expenses as per law after giving the assessee an opportunity to be heard. The Tribunal, after hearing both parties, decided to restore the issue related to these additions to the Assessing Officer for a decision in accordance with the law, allowing the appeal for statistical purposes.

In conclusion, the Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer to verify the claims of the assessee regarding the disallowance of Service Tax paid and other minor miscellaneous advances written off. The decision was pronounced on 30th June 2021 after a Virtual Hearing in the presence of both parties.