Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (9) TMI 380 - AT - Income TaxDisallowance of amount of service tax payable u/s 43B - Held that:- Since the said amount of service tax was not received during the year, the ld. AR argued that no disallowance can be made on this score u/s 43B. For this proposition, he relied on the judgment of CIT VS. Ovira Logistics (P) Ltd. (2015 (4) TMI 684 - BOMBAY HIGH COURT). For similar proposition, he relied on the order passed by the Chennai bench of the tribunal in ACIT VS. Real Image Media Technologies (P) Ltd. (2007 (12) TMI 263 - ITAT MADRAS-C ) in which it has been held that service-tax though billed but not received not having become payable to the credit of the Central Government by virtue of s. 68 of the Finance Act, 1994, r/w r. 6 of the Service-tax Rules, 1994, the same cannot be disallowed under s. 43B. No contrary decision has been brought to our notice by the ld. AR. Thus we hold that since the amount of service tax in dispute was admittedly not realized by the assessee, the same could not be disallowed u/s 43B. Decided in favour of assessee. Addition of amount of bad debts written off in the books of account - Held that:- There is no dispute on the fact that the assessee wrote off a sum of ₹ 7.75 lac in his books of account as bad debt. The Hon’ble Supreme Court in T.R.F. Ltd. vs. CIT (2010 (2) TMI 211 - SUPREME COURT ) has held that after 1.4.1989 the assessee is not required to establish that the debt has become bad in the previous year and a deduction on account of bad debts is permissible on a simple write off of the amount of bad debt. The deduction on account of bad debts is permissible on write off only if the amount of debt has been taken into account in computing the income of the assessee for the instant year or an earlier year. As decided in DCIT vs Shreyas S. Morakhiya (2010 (7) TMI 455 - ITAT MUMBAI ) amount receivable by the assessee share broker on account of brokerage is a part of debt receivable by him from his clients against purchase of shares on their behalf and, once such brokerage is credited to his Profit & Loss Account and the same is taken into account in computing his income, the condition stipulated in section 36(2)(i) gets satisfied and, therefore, the write off of the debt representing the irrecoverable amount receivable from the clients against purchase of shares on their behalf is allowable as bad debt. The Hon’ble Bombay High Court in CIT vs. Shreyas S. Morakhiya (2012 (3) TMI 103 - BOMBAY HIGH COURT) has approved the view taken by the Special Bench supra. The facts of the instant case are, mutatis mutandis, similar to those considered and decided in the aforenoted judicial precedents. As such, the assessee deserves to succeed on this ground. - Decided in favour of assessee. Non-deduction of tax on commission and brokerage u/s 40(a)(ia) - AO opined that the assessee was required to deduct tax at source u/s 194H - Held that:- The instant assessee is an individual. As such, he is liable to make deduction of tax at source from commission income u/s 194H only if the condition enshrined in the second proviso is satisfied, i.e. sales or gross receipts must exceed the monetary limit (Rs.40 lac at that time) during the financial year preceding the financial year in which commission is paid. Thus if the assessee in question pays commission or brokerage in the previous year 2007-08 relevant to assessment year 2008-09, then, his sales, gross receipts or turnover for the previous year 2006-07 relevant to assessment year 2007-08 must exceed ₹ 40 lac so as to make him liable for deduction of tax at source u/s 194H of the Act. Adverting to the facts of the instant case, we find that the total turnover of the assessee for the immediately preceding year was ₹ 26.74 lac. Since this amount of total turnover for the immediately preceding year does not breach the limit of ₹ 40 lac, there can be no obligation on the assessee to deduct tax at source on commission paid in the previous year relevant to assessment year under consideration.- Decided in favour of assessee. Addition u/s 68 - CIT(A) deleted the addition - Held that:- The assessee furnished reconciliation before the ld. CIT(A) in respect of balances of the parties appearing in his books of account and the corresponding balances in the books of such parties. The ld. CIT(A) found reconciliation in order and, accordingly, deleted the addition. The ld. DR could not controvert any discrepancy in such reconciliation. Under such circumstances, we are of the considered opinion that the ld. CIT(A) has taken an unimpeachable view on this issue.- Decided in favour of assessee.
|