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TMI Blog2021 (7) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... he rental income returned by the assessee and therefore there cannot be any occasion for making any disallowance. This aspect also appears to have neither been noted by the Ld.CIT(A) and nor therefore verified - assessee has also argued that even as per section 23 of the Act, GST is not a tax covered under it for the purpose of being allowed as deduction only on payment basis. Facts relating to the issue need to be determined and verified in the first place, including amongst other things as to which component of income the GST relates to whether rental income or income from business and profession. If it found to relate to rental income then whether it has been included in the rental income returned by the assessee . If it has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT (Appeals) has erred in confirming the addition made the Id. Assessing officer (CPC) by holding that the provisions of section 43B had not been complied with by the appellant. 3. That the Id. CIT( Appeals) has erred in law by wrongly applying the provision of section 23 by holding that even in case of rental income the deduction of GST paid was allowable only it it was actually paid although the proviso to section 23 very clearly prescribes the term 'taxes levied by the Local Authority'. 4. That the Id. C1T(A) has grossly erred by assuming that the appellant had claimed deduction of property tax, whereas the issue involved was of GST relating to rental income declared by the appellant. 5. Without prejudice to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department reflecting a total income of ₹ 21,14,720/-. That the CPC, Bengaluru, while processing the return u/s 143(1) of the Act, disallowed an amount of ₹ 2,29,820/- under the head 'income from business or profession on the basis of reporting by the Auditor in Form No.3CB-3CD filed in the case of the assessee for the impugned year i.e. assessment year 2018-19. The auditor of the assessee, in the Tax Audit Report, filed in Form No.3CB-3CD, had mentioned the GST payable of the said amount of ₹ 2,29,820/- on rent received by the assessee and which had remained unpaid till the date of the Audit Report i.e. 01.10.2018 and this amount had been picked up by the CPC and added back to the income of the assessee. 5. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable. No details w.r.t. the payment of the same as required u/s 43B are mentioned in the audit report. The A.O has disallowed the claim for deduction while processing the return u/s 143(1) of the Income Tax Act, 1961. In the give limited facts on record as brought out in the return filed by the appellant there is no case for grievance. However, the appellant in the appeal proceedings is making two claims. Firstly, that the disallowance u/s. 43B of the Act is not applicable to the Rental Income and hence the disallowance was not called for. However, at the same time, it is clear that under the head Income from House Property only deduction of actual taxes Paid is allowable. Hence this claim of the appellant is misplaced. The claim that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me from business or profession . 2) The Ld.Counsel for the assessee further contended that the reference in section 23 of the Act relating to income returned under the head income from house property of deduction of taxes from the rental income only on payment basis, related to taxes levied by local authority in respect of the property and was not relatable to GST levied on the rental income and, therefore, deduction of the same was not to be allowed only on payment basis as held by the Ld.CIT(A) in his order. 8. At this juncture, the Ld.Counsel for the assessee was asked at Bar to show what income was reflected in the return of income filed by him for the year. He took us to Paper Book page No.7 being computation of income for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the facts as shown by the assessee needed to be verified. 9. On hearing both the parties, therefore, we are of the view that the issue has not been adjudicated by the Ld.CIT(A) after appraising correctly and completely the facts relating to the same. Admittedly, the tax auditor has reported the GST payable as outstanding, in the reporting at point no 26 of the tax audit report, relating to disallowance to be made u/s 43B of the Act. The Ld.Counsel for the assessee has claimed that the said section has no relevance in its case since the GST relates to rental income returned by it and not income from business and profession to which section 43B of the Act is applicable. But at the same time, we have noted that the assessee has ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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