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TMI Blog2013 (7) TMI 1033X X X X Extracts X X X X X X X X Extracts X X X X ..... to 4 pertain to issue of treating service tax as part of trading receipts and had to be included as per the provisions of section 145A. 3. In the assessment proceedings, the AO enquired from the assessee for the reasons as to why service tax is not to be included as per the provisions of section 145A. The assessee gave reasons for non inclusion of service tax in the cost of the components. The reasons did not find favour with the AO, who, enhanced the trading profit by ₹ 69,20,599/- and added the same to the income of the assessee. 4. The assessee approached the CIT(A), who sustained the order of the AO on the point of inclusion of service tax, invoking the provision of section 145A. It was submitted before the CIT(A) that provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing and trading accompany is also off the mark as it is the taxes and leives which are central to section 145A and not the sector which collects and pays these taxes and levies. In this context, service tax stands on the same footing as excise duty, sales tax and such other taxes which are collected to be paid to the Government . 6. Aggrieve, the assessee in now before the ITAT. 7. Before us, the AR pointed out that the issue has been dealt with by the Hon ble Delhi High Court in the case of CIT vs Noble Hewitt (I) Pvt. Ltd., reported in 305 ITR 324 and ACIT vs Real Image Media Technologies Pvt. Ltd. reported in 306 ITR 106 (AT-Chennai). In this case, the coordinate Bench held, that service provider was merely acting as an agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtains to addition of ₹ 1,20,583/- u/s 41(1) of the Act. 14. Aggrieved the assessee is now before the ITAT. 15. Before us, the AR submitted that in the assessment proceedings the AO had required the parties to send the balance verifications. The AO found differences in balances in respect to certain parties, which according to him reduced the liability of the assessee vis- -vis those parties. The AO, therefore, invoked the provision of section 41(1) and added the difference of liabilities due to those parties to the income of the assessee. 16. The assessee approached the CIT(A), who sustained the order of the AO. While coming to such a decision, CIT(A) brings fore following facts, taking into consideration the decision arrive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer granted the Appellant adequate opportunity to justify the differences, it would have been explained to him that the conjectures drawn by him, and consequential additions are erroneous. Further, the appellant could have, in relevant cases, requested for cross-examination of the parties concerned . 6.3 I have considered the assessment order and the submissions of the Appellant. Looking into the nature of the liability and facts brought on record by the Assessing Officer, I agree with the Assessing Officer. To this end, I find that there were distinct discrepancies in the amount of the liability as booked by the Appellant and the other parties. These discrepancies have been clearly brought out by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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