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TMI Blog2023 (9) TMI 1537X X X X Extracts X X X X X X X X Extracts X X X X ..... of any merit for issue in hand. Since the issue pertaining to VAT has been deliberated and decided by the Hon ble Jurisdictional High Court of Chhattisgarh in the case of Ganpati Motors [ 2017 (4) TMI 1613 - CHHATTISGARH HIGH COURT] wherein it was categorically noted that in the situation where the Assessing Authority and the First Appellate Authority did not doubt the modality of the accounting system adopted by the assessee, is an outstanding phenomenon which goes in favour of the assessee. Under such circumstances, it is not necessary for the authorities to consider, whether Section 43B of the Act is to be relied on by the assessee to claim any deduction. Decided in favour of assessee. - SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER For the Appellant : Shri Makarand M. Joshi Shri Aniruddha Kavimandan, Cas For the Respondent : Shri Satya Prakash Sharma, Sr. D.R. ORDER PER ARUN KHODPIA, ACCOUNTANT MEMBER: This appeal filed by the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-II, Raipur, dated 23.03.2018, and pertains to assessment year 2013-14, decided in appeal instituted against the order by Dy. Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return u/s 139 of Act, however the assessee had made certain payment aggregating to Rs. 2,02,96,683/- beyond the date of filing of return, thus, Ld AO observed that the same considered to be allowable for deduction according to the provisions of section 43B of the ACT. It was also the observation of the Ld AO that the assessee was unable to furnish any breakup of the amount actually paid pertains to the relevant year or earlier years. Therefore, disallowance made under Section 43B of the Act was justified and should be sustained. Learned Sr. D.R. further draw our attention to the written submissions made by the Sr. D.R. of the Department dated 30.03.2023, the same is extracted as under: Before, The Hon'ble Member(s), ITAT Bench, Raipur (C.G.). Sub: Appeal filed under section 253 by the Revenue in the case of Sandeep Surendra Nair for the A.Y. 2013-14, request regarding: 1. Procedural facts on records Reference No. ITA 100/RPR/2018 Appellant The assessee Adverse CIT appeal order Return filed on 29.09.2013 1,04,32,090/- A.Y. 2015-16 Status and nature of trade Contractor mechanical work Order under Section 143(3) Income assessed at Rs. 3,12,78,773/- Quantum of addition Rs.2,08,46 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due date as a condition for deduction - Held, yes [Paras 53 and 54] [In favour of revenue] is read as under:- 54. In the opinion of this Court, the reasoning in the impugned judgment that the non obstante clause would not in any manner dilute or override the employer's obligation to deposit the amounts retained by it or deducted by it from the employee's income, unless the condition that it is deposited on or before the due date, is correct and justified. The non- obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees' contributions which are deducted from their income. They ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the submissions of the learned DR, we are of the considered opinion that no interference is required in the decision given by the learned CIT (A). The issue of disallowance of unpaid statutory liability as prescribed u/s 43B of the IT ACT now stood resolved by several decisions. The impact of Circular No.372 dated 8th December, 1981 has also been considered. As per the said circular it is specifically mentioned that several cases have come to the notice where tax payers did not discharge their liability in respect of excise duties or other taxes although claimed, the said liability as deduction on the ground that the accounts have been maintained on mercantile basis. The CBDT has observed that on one hand the tax payers have claimed the deduction merely on the basis of accrual of liability but on the other hand, disputed the liability and did not discharge the obligation of payment of the tax. For some reasons or the other, the liability is disputed and not paid. This aspect has been considered by several Courts and came to the conclusion that in a situation when deduction has not been claimed and a separate account has been maintained, then disallowance u/s 43B of the IT Act sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase and sale of goods and inventory for the purposes of determining the income chargeable under the head Profits and gains of business or profession shall be- (i) in accordance with the method of accounting regularly employed by the assessee; and (ii) further adjusted to include the amount of any tax, duty.. cess or fee (by whatever name called) actually paid or incurred by the assessee to bring the goods to the place of its location and condition as on the date of valuation. Explanation For the purposes of this section, any tax, duty. cess or fee (by whatever name called) under any law for the time being in force, shall include all such payment notwithstanding any right arising as a consequence to such payment. (b) The grievance of the Revenue to the impugned order of the Tribunal is that Section 145A(a)(ii) of the Act would apply as the amount receivable on rendering service tax. This service services would also include the similar to excise duty, sales tax and other taxes, which have to be collected to be paid over to the Government. (c) It is very clear from the reading of Section 145A(a)(ii) of the Act that it only covers cases where the amount of tax, duty, cess or fee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .f. 1st April, 1999. It was thereafter substituted by Finance (No.2) Act, 2009 which is identical, except for addition of clause (b), dealing with interest. However, the Parliament did not while substituting it, deem it fit to explicitly include the valuation of Services therein. Thus, it is clear that the legislature never intended to restrict the applicability of Section 145A of the Act only to goods and not extend it to Services. As observed by the Apex Court in State of Bihar v/s. S. K. Roy AIR 1966 (SC) 1995 :- It is well recognized principle in dealing with construction that a om subsequent legislation may be looked at in order to see what is the proper interpretation to be put upon an earlier Act where the earlier Act is obscure or capable of more then one interpretation. We must make it clear that we do not find any ambiguity in Section 145A of the Act as arising for our consideration. However, even if one were to assume the main part of Section 145A of the Act, is capable of more then one interpretation, the interpretation sought to be canvassed by the Revenue, is not sustainable. Therefore, Section 145A of the Act would have no application in cases where service is provid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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