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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 ..... ter referred to as 'Act'. 2. The assessee has raised the following grounds: 1. That the order passed by the Id. CIT (Appeals)-2. Chandigarh dated 29.07.2020 is bad both in the eyes of law and facts. 2. That on the facts and circumstances of the case and law, the Id. CIT (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 levie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the facts of the case stating that the assessee was in the business of trading in sanitary and hardware goods in a proprietary concern at Mohali and had filed his Income Tax Return for the impugned year on the e-filing portal of the Department reflecting a total income of Rs. 21,14,720/-. That the CPC, Bengaluru, while processing the return u/s 143(1) of the Act, disallowed an amount of Rs. 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 Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, 4 & 6: I have perused the facts of the case, the action of the A.O. and the submissions of the appellant. The appellant in this case filed the return wherein in the audit report GST of Rs. 2,29,8207- is shown as 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 no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) The GST related to rent paid which was returned under the head "income from house property", while disallowance u/s 43B of the Act could be made only against the income returned under the head "income 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any adjustment by way of disallowance, whatsoever, was possible when the amount of GST itself, was possibly not reflected in the income returned by the assessee. The Ld. DR stated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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