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TMI Blog2021 (8) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the ld. CIT(A) erred in deleting the addition of Rs. 1,88,77,981 u/s 43B in respect of unpaid statutory dues of service tax, Excise and PF by changing the method of accounting. 2. On the facts and in the circumstances of the case, the ld. CIT(A) erred in not appreciating the fact that the assessee cannot avoid disallowance u/s 43B in respect of unpaid statutory dues of service tax, Excise and PF by changing the method of accounting. 3. On the facts and in the circumstances of the case, the ld. CIT(A) erred in not appreciating the fact that the as has changed the method of accounting from inclusive to exclusive only to avoid addition u/s 43B. 4. On the facts and in the circumstances of the case, the ld. CIT(A) erred in not appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 147of the Act. Notice under section 148 dated 21.01.2013 was issued and served on the assessee. In response to notice under section 148, the assessee field its reply and submitted that return filed on 30.09.2009 may be treated as return in response to notice under section 148 of the Act. The assessee asked for reasons recorded. The reasons recorded was supplied to the assessee. The Assessing Officer after serving statutory notice under section 143(2) r.w.s. 142(1) of the Act proceeded for re-assessment. The Assessing Officer during assessment proceeding while going through the auditor's report noted that certain dues were not paid by assessee-company till date of filing of return of income as confirmed by auditor. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of filing of return. The Assessing Officer further held that for unpaid PF, no explanation is offered by the assessee. Accordingly, aggregate of service tax, excise and unpaid PF which comes to Rs. 1.88 crores was added to the income of assessee under section 43B of the Act. 4. Aggrieved by the additions the assessee filed the appeal before the Ld. Commissioner of (Appeals) [CIT(A)]. Before Ld. CIT(A) the assessee filed detailed written submission. The submission of assessee is recorded para-5 of the order of Ld. CIT(A). In the submission, the assessee stated that they are following exclusive method of accounting and has neither included service tax in its gross receipt not claimed any expense or VAT, service tax or excise duty and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se and VAT in his income nor claimed service tax, excise and VAT as expenditure therefore question of disallowance under section 43B of the Act does not arise. The assessee also relied upon various case law. The Ld. CIT(A) after considering the submission of assessee deleted the entire addition by holding that assessee followed exclusive method of accounting and whatever liability / expenses debited to profit and loss account had been paid through CENVAT credit and profit and loss account. Aggrieved by the order of Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. 5. We have heard the submission of Ld. Senior Departmental Representative (Sr DR) for the Revenue and Ld. Authorized Representative (AR) for assessee and hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relied upon the decision of Hon'ble Delhi High Court in the case of CIT vs. Noble & Hewitt (I) (P) Ltd., (2008) 305 ITR 324 (Del) wherein Hon'ble court held that when assessee neither claimed any deduction nor it debited amount as an expenditure in profit and loss account and the assessee was following mercantile system of accounting no addition to the income of assessee can be made. Total income strengthen his submissions the learned AR for the assessee relied on the following case laws; * CIT vs. Noble & Hewitt (I) Ltd., (2008) 166 Taxman 48 (Del) * ITO Vs. Shri Sanjay Rampayare Prajapati ITA No.2401/Ahd/2017 (ITAT Ahd) * SDCE Projects Pvt. Ltd. Vs DCIT, ITA No.2556/Ahd/2017 (ITAT Ahd) * ACIT vs. Real Image Media Techono ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clusive method of accounting and whatever liability or expense debited in the profit and loss account had been paid through CENVAT credit and profit and loss account so no addition under section 43B on account of unpaid service tax is warranted. 8. We find that Hon'ble Delhi High Court in CIT vs. Noble & Hewitt (I) (P) Ltd. (supra) held that when the assessee was following mercantile system of accounting and had not deposited parts of service tax collection with the authorities concerned. The assessee neither claimed the deduction in this regards nor it debited the amount as expenditure in profit and loss account, there is no question for disallowance of said amount. 9. Further the co-ordinate Bench of Tribunal in ITO Vs. Shri Sanjay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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