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2015 (12) TMI 1818 - AT - Income TaxAddition on account of unpaid Service Tax - unpaid statutory liability as prescribed u/s 43B - HELD THAT:- We are of the considered opinion that no interference is required in the decision given by the learned CIT (A). The issue of disallowance of unpaid statutory liability as prescribed u/s 43B of the IT ACT now stood resolved by several decisions. The impact of Circular No.372 dated 8th December, 1981 has also been considered. As per the said circular it is specifically mentioned that several cases have come to the notice where tax payers did not discharge their liability in respect of excise duties or other taxes although claimed, the said liability as deduction on the ground that the accounts have been maintained on mercantile basis. The CBDT has observed that on one hand the tax payers have claimed the deduction merely on the basis of accrual of liability but on the other hand, disputed the liability and did not discharge the obligation of payment of the tax. For some reasons or the other, the liability is disputed and not paid. This aspect has been considered by several Courts and came to the conclusion that in a situation when deduction has not been claimed and a separate account has been maintained, then disallowance u/s 43B of the IT Act should not be made. In the case of CIT Vs Noble & Hewitt (India) (P) Ltd. [2007 (9) TMI 238 - DELHI HIGH COURT] , the case of Chowringhee Sales Bureau P. Ltd. Vs CIT [1974 (6) TMI 5 - CALCUTTA HIGH COURT] has been distinguished and it was held that when the amount of tax has not been debited to profit & loss account as an expenditure nor claimed any deduction in respect of the said amount then, the question of disallowance u/s 43B of the IT Act does not arise. Respectfully, following this decision, we hereby hold that there was no fallacy in the view taken by the learned CIT (A). The same is hereby confirmed and ground No.1 of the appeal of the Revenue is, therefore, dismissed. Addition on account of donation treating the same as personal expenditure - HELD THAT:- We are not in agreement with the view taken by the learned CIT (A) because he has simply generalised the issue although, the AO had made a specific observation that the assessee had not filed any evidence through which the deduction could be qualified. The onus was on the assessee to place on record such evidence to establish that the donation was not in the nature of personal expenditure but in the nature of business expenditure to be allowed under the provisions of the Act. We hereby reverse the finding of the learned CIT (A) and allow this ground of appeal of the Revenue.
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