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TMI Blog2017 (6) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... n by stating that TDS was deducted on the amount of service tax. Besides the above the Authorities Below have not brought any defect in the books of account of assessee. Had there been undisclosed income of the assessee then same could have been ascertained from the ledger copies of Cipla Ltd. As such, we find that the addition has been made by Authorities Below on surmise and conjecture. In rejoinder Ld. DR has also not brought anything on record contrary to the arguments placed by Ld. AR. In this view of this matter we reverse the order of Ld. CIT(A) and directed the AO to delete the addition. Hence, this ground of assessee is allowed. - ITA No.518/Kol /2014 - - - Dated:- 2-6-2017 - Shri N.V.Vasudevan, Judicial Member And Shri Waseem A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e between total gross receipt shown by the assessee and Cipla Ltd., for ₹24,35,564/-. The AO called upon the assessee to clarify the difference of ₹24,35,564/- as discussed above. In compliance thereto, assessee submitted that there was reimbursement of expenses for ₹11,03,562/- and service tax of ₹14,28,730/- which was received from Cipla Ltd and on the same amount the Cipla Ltd. has also deducted TDS though the Cipla Ltd was not liable to deduct TDS from the amount of reimbursement and service tax. Therefore, the impugned difference on account of TDS has arisen in the income declared by the assessee and the income observed by the AO. However, AO after perusal of the agreement between assessee-company and Cipla Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat provided before the Assessing Officer. The appellant explained that it was entitled to received reimbursement of various expenses incurred by it on behalf of CIPLA and it received an amount of ₹ 11,03,562/ on reimbursement of expenses on which CIPLA deducted tax at source. The appellant also submitted that it was charging service tax of the bills and CIPLA educed tax on service tax of ₹ 14,28,730/- which was routed through the Balance Sheet. However, after going through the entire facts of the case, I am unable to agree with the submissions of the appellant. The certificate of CIPLA does not clarify the position either. The appellant has not shown the expenditure incurred against which the reimbursement of the expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire TDS. Therefore the addition of ₹ 11,03,562/- made by the Assessing Officer stands confirmed. The appellant s further contention the tax was deducted on service tax element has also not been substantiate by the appellant, Bills were not shown and the entire accounts were not explained as to the method of treatment of service tax. Furthermore, what is the method by which service tax is paid and deposited was also not explained. The service tax component should form part of the income of the appellant and the payments can be allowed u/s. 43B of the IT Act. In the absence of the details of service tax element in the commission bills, I am of the view that the Assessing Officer is justified in making the addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . He reiterated the same submissions as were made before Ld. CIT(A). On the other hand, Ld. DR vehemently relied on the order of Authorities Below. 6. We have heard the rival contentions of both the parties and perused the materials available on record and perused the order of Authorities Below. We find that there is no dispute with regard to the facts of the case therefore, the same are not repeated here for the sake of brevity. At the outset, we find that the reimbursement of expense has been shown by the assessee in its income as reimbursement of expenses for ₹11,03,562/- as evident from the profit and loss account placed on page 6 of the paper book. Therefore, we find that the observation of Authorities Below that assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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