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TMI Blog2023 (3) TMI 1423X X X X Extracts X X X X X X X X Extracts X X X X ..... mutandis for the purpose of disposing off the other appeal, i.e. ITA Nos.147 & 148/RPR/2022. The assessee has assailed the impugned order for A.Y.2017-18 on the following grounds of appeal before me: "1. Ld. CIT(A) erred in confirming disallowance of Rs. 5,33,962/-made by the AO u/s. 43B on account of nonpayment of VAT on or before due date of filing of return. The disallowance made by AO and sustained by Ld. CIT(A) is arbitrary, baseless and not justified. 2. Ld. CIT(A) erred in confirming disallowance of Rs. 7,761/- on account of delayed payment of employees' contribution to ESIC & other welfare fund made by AO invoking sec. 36(l)(va). The disallowance made by AO and sustained by Ld. CIT(A) is arbitrary, baseless and not justified. 3. The appellant reserves the right to add, amend or modify any of the ground/s of appeal." 3. At the very outset I find that all the captioned appeals filed by the assesee involves a delay of 11 days. It is the claim of the Ld. Authorized Representative (for short 'AR') for the assessee that as certain time was involved in appointing a new Counsel by the assessee, therefore, for the said reason the appeals could not be filed withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part. I, thus, on the basis of my aforesaid observations condone the delay of 11 days involved in filing of the captioned appeals. 6. Succinctly stated, the assessee who is engaged in the business of trading and installation of air conditioners had e-filed his return of income for A.Y.2017-18 on 30.10.2017, declaring an income of Rs. 11,18,100/-. The return of income filed by the assessee was processed as such u/s. 143(1) of the Act on 14.03.2019, wherein after, inter alia, making an addition u/s. 43B of the Act the "VAT payable" by the assessee of Rs. 5,33,962/-, the A.O determined his net taxable income at Rs. 17,08,910/-. 7. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals) but without success in so far the aforesaid issue under consideration was concerned. The CIT(Appeals) upheld the addition of VAT payable u/s. 43B of the Act by observing as under: "7.5 In view of the aforesaid, there can be no doubt that unpaid VAT liability cannot be allowed for deduction u/s. 43B read with section 145A of the Act. The case laws relied upon by the appellant in the cases of Asst. Commissioner of Income Tax Vs. Ganapati Motors ( supra) and CIT Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rity the relevant observations of the Hon'ble High Court are culled out as under: "2. Heard learned Counsel for the revenue and learned Counsel for the respondent-assessee. The fundamental issue that arises for decision is, as to whether a particular amount which is subject matter of the appeal is to be treated as relatable to Value Added Tax (VAT) payable by the assessee and, if so, whether it has to be actually paid by him before filing of the return under the Income Tax Act. This question is relevant, having regard to the manner in which the question of law has been framed. The issue as to whether Section 43-B of the Income Tax is attracted even when the assessee does not claim any deduction on the strength of that provision may also be relevant. 3. The Assessing Authority, on the instant issue, noticed that the assessee's claim regarding the treatment of VAT in the Books of Accounts has been verified from the Books and that has been found to be in order. The Assessing Authority also found that VAT has been found separately accounted for in the Books of Accounts. The only ground on which the Assessing Authority refused to exclude the VAT collected by the dealer from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see to claim any deduction. 7. For the aforesaid reasons, on the facts and circumstances of the case in hand, we answer to the question formulated in these appeals in the negative, that is to say, against the revenue and in favour of the assessee." 12. Considering the aforesaid judgment of the Hon'ble Jurisdictional High Court as per which, no addition can be made of an assessee's unpaid VAT tax liability that was not charged to the profit and loss account, there is substance in the claim of the Ld. AR that there was no justification for the A.O to have made an addition u/s. 43B of the amount of VAT payable of Rs. 5,33,962/- as the same was not charged to the latters profit and loss account. I, say so, for the reason that as the aforesaid claim of the assessee was in conformity with the aforesaid judgment of the Hon'ble Jurisdictional High Court in the case of M/s. Ganapati Motors (supra), therefore, the same by no means could have been dubbed as an incorrect claim and brought within the realm of the adjustments contemplated in clause (a) of Section 143(1) of the Act. Accordingly, the order of the CIT(Appeals) is set-aside and the addition made by the A.O of VAT payable of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; and (iii) VAT could have justifiably been done u/s. 143(1) of the Act. 18. As the facts and the issue involved in the present appeal remains the same as were there before me in his appeal in ITA No. 146/RPR/2022 for A.Y.2017-18, therefore, my findings recorded while disposing off the appeal in ITA No. 146/RPR/2022 for A.Y.2017- 18 shall apply mutatis-mutandis for disposing off the present appeal, i.e, ITA No. 147/RPR/2022 for A.Y.2018-19. Accordingly, the order of the CIT(Appeals) is set-aside and the addition made by the A.O on account of tax liabilities of Rs. 27,93,046/- shown by the assessee as outstanding/payable in his balance sheet on 31.03.2018 towards, viz, (i) Entry tax : Rs. 4,386/- ; (ii) Service tax : Rs. 1,83,115/-; and (iii) VAT : Rs. 26,05,546/- is vacated. Thus, the Ground of appeal No. 1 raised by the assessee is allowed in terms of my aforesaid observations. 19. It was submitted by the Ld. AR that as per instructions, he is not pressing the Ground of appeal No. 2. In view of the concession of the Ld. AR the Ground of appeal No. 2 is dismissed as not pressed. 20. Ground of appeal No. 3 being general in na ..... X X X X Extracts X X X X X X X X Extracts X X X X
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