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TMI Blog2012 (5) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... received is Rs.1,26,34,049/-. The A.O. further noted that the shareholding of the assessee company in Claris Lifesciences Ltd. is more than 10% and hence, as per the provisions of Section 2(22)(e), the same has to be added as deemed dividend. The A.O. asked the assessee to furnish explanation in this regard and in reply, it was submitted by the assessee before the A.O. that till 03.03.2006, the assessee's shareholding in Claris Lifesciences Ltd. was less than 10% and, therefore, the amount received from Claris Lifesciences Ltd. as advance on a date prior to 03.03.2006, does not attract the provisions of Section 2(22)(e) of the Income tax Act, 1961. The A.O. was not satisfied and he held that the provisions of Section 2(22)(e) of the Act are applicable in the present case and by invoking the same, he made addition of this amount of Rs.1,26,34,049/-. Being aggsrieved, the assessee carried the matter in appeal before CIT(A) who has deleted this addition and now, the revenue is in appeal before us. 4. Ld. D.R. supported the assessment order whereas the Ld. A.R. supported the order of Ld. CIT(A). Reliance was placed by him on various judgments as udder: (a) CIT vs Late C P Das ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 03.03.2006 when further 242080 shares were allotted by this company to the assessee company. Hence, the provisions of Section 2(22)(e) of the Act are not applicable in the present case under these facts. Hence, ground No.1 of the revenue is rejected. 7. Ground No.2 of the revenue is as under: "The Ld. CIT(A) has erred in law and on facts in deleting the addition of R.45,90,000/- made on account of service tax receivable." 8. The brief facts regarding this issue are noted by the A.O. in para 5 of the assessment order that during the year under consideration, the assessee has collected service tax of Rs.45.90 lacs on consultancy services provided to Claris Lifesciences Ltd. But the assessee has not shown the same as part of total receipts. The A.O. asked the assessee to give explanation in this regard. In reply, it was submitted by the assessee before the A.O. that out of total amount of other liabilities of Rs.31,98,435/-, as shown in schedule 6, an amount of Rs.10,93,542/- is of the amount of service tax payable. It was also submitted that the same is on account of service tax collected of Rs.45.,90 lacs on consultancy services provided to M/s. Claris Life ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount of Rs.34,96,458/-s was duly paid by way of adjusting the same against service tax receivable account. We also find that even if this balance amount of Rs.10.93,542/- was paid by the assessee after 31.03.2006 but before the date of filing of return of income of the present year being 29.12.2006, assessee is eligible for deduction u/s 43B of the act in respect of future payment whether by way of cash or by way of adjustment against service tax receivable account. Moreover, this issue has been decided by Ld. CIT(A) in favour of the assessee by following the Tribunal decision and judgement of Hon'ble Delhi High Court as per para 7.4 to 7.6 of his order, which are reproduced below: "7.4 I have considered the facts of the case and the submissions of the Ld. A.R. carefully. It is seen that the A.O. has made the impugned addition holding that the collection of Service tax and its payment with the Government is attracted by the provisions of sec.43B of Income-tax Act. The circumstances which have been explained by the appellant and also reproduced by the A.O. in the assessment order without any contradiction, show that the appellant collected Rs.45,90,000/- on consultancy serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncerned was the entitlement of the assessee to deduction under ss.10(1) and 10(2)(xv) of the I.T. Act, 1922. The decision is clearly distinguishable in its application to the present case. Here we are concerned with an assessee who has not even claimed any deduction on the ground of service-tax and has not debited the amount to its PandL a/c. Moreover the provisions of s.438 of the Act are quite clear in this regard. The decision of the Calcutta High Court in Chowringhee Sales Bureau (supra) was not in the context of the applicability of S.43B of the Act." 11. From the above paras of the order of Ld. CIT(A), we find that this issue has been decided by him by following the judgement of Tribunal rendered in the case of in the case of ACIT vs Real Image Media Technologies (P) Ltd. (supra), and also the judgment of Hon'ble Delhi High Court rendered in the case of CIT vs Noble and Hewitt (I) Pvt. Ltd. (supra) and no contrary decision of the tribunal or of any High Court had been brought to our notice by the Ld. D.R. of the revenue. Under these facts, we feel that no interferences is called for in the order of Ld. CIT(A) on this issue also since the issue was decided by CIT(A) by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was also raised by him that even if it is held that deduction on this account is not allowable u/s 36(1)(vii), the same should be allowed as business loss and in support of this contention, reliance was placed on the judgment of Hon'ble Gujarat High Court rendered in the case of CIT vs Abdul Razak and Co. 136 ITR 825. 16. As against this, Ld. D.R. of the revenue supported the orders of authorities below. 17. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgement cited by the Ld. A.R. of the assessee. We find that disallowance was made by the A.O. on this basis that assessee has not complied with the requirement of Section 36(2) of the Act. Ld. CIT(A) has confirmed the assessment order on this issue on this basis that the assessee could not establish that the debit balance written off have become bad during that year. Now, after this judgement of Hon'ble Apex Court rendered in the case of TRF Ltd. vs CIT (supra), there is no requirement on the part of the assessee to establish that the debt in question has become bad. But still, it has to be seen as to whether the assessee i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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