TMI Blog2023 (11) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... 40% of liability on record. AR of the assessee during her submission also prayed for giving suitable direction that in case remaining addition is sustained, the assessee may be allowed deduction in A.Y. 2020-21. Considering the submission of assessee and considering the fact that the assessee availed/went for SVLDRS and was liable to pay 40% of service tax, therefore, AO is directed to verify the contention of ld. AR of assessee and allow relief to that extent in accordance with law. So far as remaining 60% of the liability is concerned, assessee claimed that they have already offered 60% of the amount as per scheme of SVLDRS in audited account for A.Y. 2020-21, which is reflected in the audited accounts and allegedly includes this amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was Legacy Dispute Resolution Scheme and has offered the balance amount as an income in A.Y. 2020-21. 4. Demanding tax on Rs. 6,17,424/- being outstanding Service Tax Liability, out which 40% has already been paid and remaining has already been offered as an income, will lead to unjust enrichment. 5. The appellant craves leave to add, alter, amend, delete and/or withdraw any or all the above grounds of appeal. 2. Brief facts of the case are that the assessee is a Chartered Accountant Firm, filed its return of income for A.Y. 2017-18 on 31/10/2017 declaring NIL income after set off of brought forward losses of Rs. 1,18,521/-. The return was processed by the Central Processing Centre (CPC), Bangalore vide intimation dated 05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following mercantile system of accounting and exclusive method for the purpose of accounting of service tax. The assessee further explained by giving example that if Mr. X provided his services amounting to Rs. 10.00 lacs on which service tax is applicable @ 12% thereby accounting to taxable value amounting Rs. 10.00 lacs and service tax amounting to Rs. 1.20 lacs and demonstrated inclusive and exclusive method in the following manner: INCLUSIVE METHOD Profit Loss Account Debit Credit Particulars Amount (Rs.) Particulars Amount (Rs.) Service Tax Expense 1,20, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax, the amount of service tax will not impact the profit and loss account as amount of service tax is not debited to the profit and loss account i.e. it is not claimed as expenses, hence it cannot be disallowed. The assessee also relied on the decision of Hon'ble Delhi High Court in CIT Vs Noble and Hewitt (I) (P) Ltd. in I.T. Appeal No. 839/2007 dated 10/09/2007. The assessee again vide their submission dated 17/11/2021 submitted that they are following exclusive method of accounting for the purpose of accounting of service tax, it has not claimed as expenses. So if the assessee has not claimed as expenses, it cannot be disallowed and added to the income of assessee. 4. The ld. CIT(A) after considering the submissions of assessee, u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not applicable. The ld. CIT(A) disregarded the decision to the facts of the present case and confirmed the disallowance made by way of adjustment. The ld. AR of the assessee submits that the assessee has not claimed deduction of service tax so it cannot be disallowed. 6. In alternative submissions, the ld AR for the assessee submits that even if it is assumed that the adjustment is proper, the assessee was liable to pay only 40% of demand as per Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 (in short, SVLDRS). Accordingly, the amount of Rs. 2,46,970/- being 40% of addition was payable by the assessee. The disallowance under Section 43B can be made only in respect of any sum payable by the assessee by way of tax as per clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24/- on the basis of column 26 of audit report wherein amount of such expenses was disallowed, not reflected in the return for this year. As recorded above, before the ld. CIT(A), the assessee filed detailed written submission, the ld. CIT(A) concur with the action of Assessing Officer/CPC by taking a view that undisputedly, the assessee has not paid service tax till filing of return of income under Section 139(1) of the Act. Before me, the ld. AR of the assessee in alternative submissions vehemently submitted that the assessee applied for the benefit of SVLDRS and only 40% of Rs. 6,17,424/- was payable, which stand paid. The ld AR for the assessee has also filed copy of relevant challan in respect of 40% of liability on record. The ld. AR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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