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TMI Blog2018 (1) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... UR] Addition on account of service tax U/s 43B - Held that:- As the respondent assessee had not claimed any deduction on account of the service tax payable in order to determine its taxable income. In the above view, there can be no occasion to invoke Section 43B of the Act. See CIT Vs Knight Frank (India) Pvt. Ltd. [2016 (8) TMI 1096 - BOMBAY HIGH COURT] - ITA No. 194/JP/2017 - - - Dated:- 8-1-2018 - SHRI VIJAY PAL RAO, JM AND DR. ARJUN LAL SAINI, AM For The Assessee : Shri Rohan Sogani (CA) For The Revenue : Shri P.P. Meena (JCIT) ORDER PER: VIJAY PAL RAO, J.M. This appeal by the assessee is directed against the order dated 29/12/2016 of ld. CIT(A)-I, Jaipur for the A.Y. 2012-13. The assessee has raised fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s appeal is dismissed being not pressed. Accordingly, ground No. 1 of the assessee s appeal is dismissed being not pressed. 3. Ground No. 2 of the assessee s appeal is regarding disallowance made U/s 40(a)(ia) of the Income Tax Act, 1961 (in short the Act). The ld AR of the assessee has submitted that the Assessing Officer has rejected the books of account of the assessee and estimated the income of the assessee by applying N.P. rate, therefore, once the income of the assessee is estimated by applying the N.P. rate then no further disallowance is called for U/s 40(a)(ia) of the Act. In support of his contention he has relied upon the decision of Coordinate Bench of this Tribunal in the case of Rakesh Construction Co. Vs ACIT in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imation and best judgment after rejecting the books of account U/s 145(3) of the Act. The Assessing Officer has applied N.P. rate of 8% on the total receipts of ₹ 1,53,44,942/- and accordingly, the addition of ₹ 2,18,277/- was made by the Assessing Officer. The ld CIT(A) has confirmed the addition of the Assessing Officer by rejecting the contention of the assessee. The amount was already paid during the previous year and not payable at the end of the year. Thus, it is clear that the contention raised by the assessee before us that after rejection of books of account and estimation of income of the assessee, no further addition can be made by the Assessing Officer, has not been considered or decided by the ld. CIT(A). We find th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jun Bhowmick (supra) directly support the case of the assessee. In that case, the view taken by the Kolkotta Bench of the ITAT has been confirmed by the Honble High Court wherein it has held that once the n.p. rate is estimated, the AO cannot based this disallowance on the same books of accounts for the purpose of disallowance by invoking provisions of section 40(a)(ia) of the Act or general disallowance u/s 37 of the Act. The estimation made by the AO of net profit will take care of every addition related to business income or business receipts and no further disallowance can be made. It is also noted that Jaipur Bench of ITAT in the case of Banas Sand Toll Tax collection (supra) has taken a similar view in the matter following the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable on the record. There is no quarrel on the point that if the assessee has not claimed a deduction on account of service tax payable then the provisions of Section 43B of the Act cannot be invoked. However, at the same time, it is also to be kept in mind that when the assessee has not claimed any deduction for the year under consideration and which has not been disallowed U/s 43B of the Act then the assessee cannot take the benefit of Section 43B in future when the said service tax is paid because the assessee has not included this amount as part of turnover. The Hon'ble Bombay High Court in the case of CIT Vs Knight Frank (India) Pvt. Ltd.(supra) has held in para 7 as under: 7. Regarding question (ii): ( a) It is an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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