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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 ..... of law - Held 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 - Decided in favor of the assessee - ITA. No. 2985/Ahd/2009, - - - Dated:- 20-10-2011 - T.K. Sharma, A.K. Garodia, JJ. S.P. Talati, Sr. DR for the Appellant S.N. Soparkar, AR for the Respondent ORDER A.K. Garodia, Accountant Member 1. This appeal by the revenue and cross objection by the assessee are directed against the order of Ld . CIT(A) VIII, Ahmedabad dated 01.07.2009 for the assessment year 2006-07. The appeal of the revenue and the C.O. of the assessee were heard together and for the sake of convenience, both are being disposed of by this common order. 2. First we take up the appeal filed by the revenue. The ground No.1 raised by the revenue is as under: "The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs.1,26,34,049/- as deemed dividend." 3. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (22)(e) are not applicable in the present case. 6. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgements cited by the Ld. A.R. of the assessee. No contrary judgment was brought to our notice by the Ld. D.R. of the revenue. In the case of CIT vs Late C.R. Das (supra), the facts were similar to the facts of the present case. In that case also, on 16.03.1998, when the transaction of lease was entered into between the assessee and the company from whom the advance was received, the shareholding of the assessee in the said company was less than 10%. Under these facts, it was held by Hon'ble Delhi High Court in that case that since on the date of receipt of the amount, the assessee was having less than 10% of beneficial interest in that company, by no stretch of imagination the amount of Rs.25 lacs received by the assessee can qualify as deemed income under the provisions of Section 2(22)(e) of the Act. Respectfully following this judgement of Hon'ble Delhi High Court, we hold that in the present case also, no interference is called for in the order of Ld. CIT(A) because admittedly when the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d this addition on this basis that since the assessee has not claimed the service tax as deduction in the P and L account, the provisions of Section 43B are not attracted. Now, the revenue is in appeal before us. 9. Ld. D.R. of the revenue supported the assessment order whereas Ld. A.R. of the assessee supported the order of Ld. CIT(A). He also placed reliance on the judgment of Hon'ble Delhi High Court rendered in the case of CIT vs Nobles and Hewitt (I) Pvt. Ltd. as reported in 305 ITR 304. He also placed reliance on the Tribunal decision rendered in the case of ACIT vs Real Image Media Technologies (P) Ltd. as reported in 114 ITD 573 (Chennai). 10. We have considered the rival submissions, perused the material on record and have gone through the orders of the authorities below and the judgements cited by the Ld. A.R. of the assessee. We find that details of service tax payable and service tax receivable is on page 58-60 of the paper book. We find that in the service tax payable account, the debit balance of service tax receivable account of Rs.34,96,458/- had been transferred on 31.03.2006 and the net amount of service tax payable as on 31.03.2006 was amount of Rs.10.93, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to claim deduction-on account of service tax and therefore no disallowance can be made on the technology of Sales-tax, Excise duty, etc." 7.6 Hon'ble Delhi High Court in the case of CIT vs. Noble and Hewitt Pvt. Ltd., 305 ITR 324 has held that " the assessee following mercantile system of accounting not paying Government part of Service Tax collected by it, not debiting the same to its Profit and Loss account as an expenditure nor claiming any deduction in respect of the said amount, the question of disallowing the same u/s.43B does not arise." It may be pointed out that the Hon'ble High court while deciding so has also observed that the decision of Hon'ble Calcutta High Court in the case of Chowringhee Sales Bureau Pvt. Ltd vs. CIT 110 ITR 385 does not apply in respect of Service Tax. The relevant extract of the judgement are as under: "Learned counsel for the Revenue urges that the decision of the Calcutta High Court in Chowringhee Bales Bureau (supra) covers the point in its favour. We are unable to agree. In that case it was held that the liability to pay sales tax arose the moment a sale or purchase was effected and if an assessee was maintaining accounts on the merc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is therefore submitted that the decision of learned CIT (Appeals) being c the facts and circumstances of the case as well as in law, the same be ace 4. On the facts and circumstances of the case as well as in law, the le (Appeals) has grossly erred in confirming the addition/disallowance of Rs.4,15,798/- on account of sundry balances written off. On the facts and circumstances of the case, the learned CIT (A) ought to have deleted the unjustified addition/disallowance made by the AO on account of sundry balances written off. It is therefore prayed that the order of the learned CIT (A) on this point be reversed and the addition/disallowance made by the AO be deleted. 14. It was submitted by the Ld. A.R. of the assessee that ground No.1 of the C.O. is general and grounds Nos. 2 and 3 of the C.O. are merely in support of the order of Ld. CIT(A). Hence, no separate adjudication is called for with reference to these three grounds of the C.O. 15. Regarding ground No.4 of the C.O., it was submitted by the Ld. A.R. of the assessee that now, this issue is covered in favour of the assessee by the judgment of Hon'ble Apex Court rendered in the case of TRF Ltd., as reported i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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