2014 (4) TMI 697

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..... me reason, the assessee is unable to recover the service tax, then, either it can write–off in this year or can claim as loss by such an amount - Even under the cash system of accounting, the fees which has been received including service tax, the same has to be taken as receipts of the year. If there is any unrealized amount on account of service tax already taken as part of receipts, the same can be claimed as loss in this year - if the unrealized amount is received later, the same would become taxable in the year of receipt and in such situation also, it cannot be disallowed or added in this year - the finding of the CIT(A) cannot be upheld as the amount which has been written-off on account of service tax is allowable because it has .....

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..... ing Officer held that the assessee is not eligible for write off in the absence of any correspondence to show that the assessee has made any efforts to recover the claims from the clients. Accordingly, he disallowed the claim of Rs. 1,09,184. 3. Before the learned Commissioner (Appeals), it was submitted that the assessee has been billing its clients towards professional fees relating to audits and also debiting them with service tax leviable on the said fees. Some of the clients did not make the payment of service tax but had only paid the audit fees, whereas the assessee has paid the service tax to the government account on gross fees receivable. The amount of Rs. 1,09,184 remained outstanding on account of service tax from its client, .....

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..... has to be allowed in this year only, because the assessee had already debited the amount of service tax in its Profit Loss account earlier. 5. Learned Departmental Representative, on the other hand, relied upon the order of the learned Commissioner (Appeals). 6. We have heard the rival contentions and perused the findings of the learned Commissioner (Appeals). In this case, it has not been disputed that the assessee has been billing its client towards professional fees which also includes service tax leviable on the above fee. It is the liability of the assessee to deposit the service tax which is to be collected from the clients. If any of the client has not paid the service tax and the assessee had already taken into consideration .....

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