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2022 (12) TMI 1498 - AT - Income TaxRevision u/s 263 - sustainability of the disallowance of the assessee’s claim for deduction of “VAT” on sale of liquor - CIT holding a conviction that the “VAT” claimed by the assessee which was liable for disallowance u/s.40(a)(iib) was summarily allowed by the A.O, thus, vide his order passed u/s.263 had set-aside the order passed by the A.O u/s.143(3) - HELD THAT:- We find substance in the claim of the Ld. AR that the issue involved in the present appeal is squarely covered by the judgment of Kerala State Beverages Manufacturing & Marketing Corporation Ltd. [2022 (1) TMI 184 - SUPREME COURT]. As stated by the Ld. AR, and, rightly so, the Hon’ble Apex Court had approved the view taken by the Hon’ble High Court of Kerala that [2020 (5) TMI 176 - KERALA HIGH COURT] as “surcharge on sales tax” is a “tax”, and Section 40(a)(iib) does not contemplate “tax”, and surcharge on sales tax is not a “fee” or a “charge”, therefore, no disallowance under the said statutory provision was called for in the hands of the assessee. Considering the aforesaid judgment of the Hon’ble Apex Court[surpa], we are of the considered view that the same in fact supports the claim of the assessee that the provisions of Section 40(a)(iib) would not be applicable to the case of the assessee qua the “VAT” paid by the assessee company. We, thus, in terms of our aforesaid observations set18 aside the order passed by the Pr. CIT u/s.263 of the Act, dated 28.03.2021, and restore the order of the A.O passed u/s.143(3), to the extent he had allowed the assessee’s claim for deduction of “VAT”. Assessee appeal allowed.
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