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2017 (4) TMI 1613 - CHHATTISGARH HIGH COURTAddition u/s 43-B - unpaid VAT - only ground on which the Assessing Authority refused to exclude the VAT collected by the dealer from the profit of business is on the basis that the VAT component was not paid off on or before the due date for furnishing the return in relation to the previous year u/s 139(1) - HELD THAT:- The transaction dealt with in Chowringhee's case [1972 (10) TMI 4 - SUPREME COURT] related to auction and the nature of the income derived by an auctioneer in the process of auction. In contradistinction thereto, are the decisions of Noble & Hewitt (India) (P) Ltd. [2007 (9) TMI 238 - DELHI HIGH COURT], which make a nice distinction between Chowringhee's case and instances where Profit and Loss accounts and Service Tax accounts are maintained separately following mercantile system of accounting. As rightly noticed therein, it is not for the Income Tax department to make out a case relating to the correctness or otherwise of the mercantile system of accounting, resorted to and maintained by an assessee. The acceptability or otherwise of the accounts in a mercantile system would obviously be a matter of concern for other taxation authorities. In the case in hand, as already noted, the fact situation that 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 - it is not necessary for the authorities to consider, whether Section 43-B is to be relied on by the assessee to claim any deduction. 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.
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