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2016 (2) TMI 130 - HC - Income TaxReopening of assessment - Income of the assessee chargeable to tax having escaped assessment - Held that:- We may recall that the reason recorded by the Assessing Officer for issuing the impugned notice states that the assessee had leased out a property for monthly rent of ₹ 3 lacs, which was exclusive of the service tax. He had collected service tax of ₹ 8.23 lacs and showed it under the head of administrative and other expenses. According to the Assessing Officer, instead, the assessee should have shown gross income of ₹ 44.23 lacs of rental income and thereafter should have claimed ₹ 8.23 lacs of service tax as expense. In our opinion, whichever way it is shown, in the eventual tax computation, it would not make any difference. Whether the assessee showed net income of ₹ 36 lacs by way of rental income or showed the gross income of ₹ 44.23 lacs inclusive of the service tax and claimed ₹ 8.23 lacs of service tax separately as expense, in the ultimate analysis, it was this sum of ₹ 36 lacs which was chargeable to tax. In other words, the service tax component of ₹ 8.23 is not only as per the CBDT circular, even as per the Assessing Officer himself, as indicated in the reasons recorded, was not chargeable to tax. That being the position, mere accounting entry or even if there was some defect in indicating such amount in the accounts presented by the assessee, as long as income chargeable to tax had not escaped assessment, reopening of the assessment would not be permissible. - Decided in favour of assessee
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