2016 (2) TMI 130

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..... s of service tax as expense. In our opinion, whichever way it is shown, in the eventual tax computation, it would not make any difference. Whether the assessee showed net income of ₹ 36 lacs by way of rental income or showed the gross income of ₹ 44.23 lacs inclusive of the service tax and claimed ₹ 8.23 lacs of service tax separately as expense, in the ultimate analysis, it was this sum of ₹ 36 lacs which was chargeable to tax. In other words, the service tax component of ₹ 8.23 is not only as per the CBDT circular, even as per the Assessing Officer himself, as indicated in the reasons recorded, was not chargeable to tax. That being the position, mere accounting entry or even if there was some defect in in .....

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..... ly lease rent of ₹ 3,00,000/- which is exclusive of Service Tax. The P L accounted enclosed, however indicates that the assessee company had debited Service Tax of ₹ 8,23,397/- under the head administrative other expenses as per Schedule-IT. In view of the above, the assessee should have offered ₹ 44,23,397/- (Rs.36,00,000/- + ₹ 8,23,397/-) as the total lease rent income and thereafter should have claimed ₹ 8,23,397/- as service tax as expense. Failure to do so has resulted in underassessment of income to the extent of ₹ 8,23,397/-. Hence, I have reason to believe that income of ₹ 8,23,397/- has escaped assessment is a fit case for reopening the assessment u/s.147 of the Act. 2. Having .....

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..... ition contending that in the original scrutiny assessment, this issue was not examined. The petitioner should have disclosed gross income of ₹ 44.23 lacs from rentals, instead he separated service tax element and showed only ₹ 36 lacs of rental income for tax. He lastly submitted that even for the assessment completed under Section 115JB of the Act, by virtue of addition of ₹ 8.23 lacs, loss would be reduced. 5. We would focus only on the question of income of the assessee chargeable to tax having escaped assessment. In this context, we may recall that the reason recorded by the Assessing Officer for issuing the impugned notice states that the assessee had leased out a property for monthly rent of ₹ 3 lacs, which .....

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