Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 1288 - AT - Income TaxAbsence of proper genuineness of creditors - Additions to profit of the assessee u/s 41(1) - Held that:- The assessee has submitted the chart before us which shows that out of total outstanding sundry creditors 1,26,99,643/- are added back to income u/s 41(1) of the Act and some of the amounts was returned back. The Ld. A.R. has also submitted before us that same parties are there in the year under consideration and their liability was existing up to A.Y.2013-14. Therefore, we restore this matter back to the file of the AO to verify the same and decide the issue afresh in light of the above chart. In the result, appeal of the assessee is allowed for statistical purposes. Additions invoking the provisions of section 43B and disallowance of unpaid service tax liability - CIT(A) has deleted the addition on the ground that section 43B would attract only to a case where an item is allowable as deduction but because of failure to make payment such deduction would not be allowed - Held that:- The section 43B is applicable in the case of sales tax and excise duty but same could not be in case of service tax. The Ld. CIT(A) held that the assessee’s service provider is merely acting as an agent of the government, he is not entitled to claim deduction on account of service tax, therefore, no disallowance can be made on analogy of service tax . - department appeal is dismissed. Disallowance of bad debts - Held that:- Issue in disallowance of bad debt is covered by the Hon’ble Supreme Court in the case of TRF Ltd. (2010 (2) TMI 211 - SUPREME COURT) that it is not necessary for assessee to establish that the debt in fact has become irrecoverable. When a bad debt occurs it leads to closing of customer account therefore, our interference is not required.- Assessee's appeal is allowed for statistical purposes and department appeal is dismissed.
|