9911796707
TMI Blog2025 (4) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... eal on the grounds raised in Appeal-Memo (Form No. 36). 2. The background facts leading to present appeal are such that the assessee filed return of income of relevant AY 2018-19 which was subjected to scrutiny-assessment and the AO completed assessment u/s 143(3) vide order dated 12.04.2021. Subsequently, Ld. PCIT examined the record of assessment-proceeding and viewed that the assessment-order passed by AO is erroneous in so far it is prejudicial to the interest of revenue which attracts revisionary-jurisdiction u/s 263. Accordingly, the PCIT issued show-cause notice dated 22.01.2024 and finally passed revision-order dated 21.02.2024. Aggrieved by such revision-order, the assessee has come in this appeal before us. 3. Ld. AR for assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 30.06.2017 under then prevailing regime of Excise Law called "CENVAT". Subsequently, when GST law came into force in the country from 01.07.2017 in replacement of CENVAT, the assessee was eligible to claim credit of unutilised excise duties against GST liability but still the credit of component of unutilised 'Education Cess' was not allowed by virtue of section 140 of GST Act. Since the assessee was having unutilised education cess as on 30.06.2017 amounting to Rs. 14,79,263/- as per audited books of account, the same was written off in P&L A/c. The assessee also filed unit-wise complete details of unutilised education cess of Rs. 14,79,263/- for its three units located at Dewas, Ranipet and Pune in its reply to PCIT, which is noted by P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n P&L A/c (Paper-Book Page 15-17) and in reply dated 10.03.2021 vide Para 7(C) the assessee explained that major increase was under the head administrative expenses which included 'education cess written off' amounting to Rs. 14.80 lacs for which input credit was not available due to enactment of GST Act with effect from 01.07.2017 (Paper-Book Page 9-14). Thus, during assessment-proceeding also, the assessee made a clear-cut explanation qua the impugned item to AO. 7. With above submissions, Ld. AR submitted that there is no error in the assessment-order of AO or even there is no prejudice to the interest of revenue because the claim of assessee was very much allowable as deduction and not hit by the provision of section 40(a)(ii). Accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . XXX Explanation 3. - For the removal of doubts, it is hereby clarified that for the purposes of this sub-clause, the term "tax" shall include and shall be deemed to have always included any surcharge or cess, by whatever name called, on such tax;" Thus, the provision of section 40(a)(ii) disallows any tax levied on the profits or gains of any business and the 'cess' levied on such tax. Such tax and cess would, of course, be 'income-tax' or 'education cess on income-tax'. The Excise duty/CENVAT and education cess thereon was levied on production of goods and not on the profit or gain of business. Therefore, the assessee is very correct in claiming that the education cess written off by it was not hit by the provision of section 40(a)( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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