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2023 (4) TMI 618 - AT - Income TaxRevision u/s 263 by CIT - amount of service tax reported in Balance Sheet CIT observed that this has not been paid and, therefore, according to the provisions of section 43B it is not allowable, which the Ld. AO failed to add back - HELD THAT:- On referring to section 43B of the Act, we note that certain deductions are allowed only on actual payment. In this section, a deduction which otherwise is allowable under this Act is subjected to the condition of actual payment for its allowability for the purpose of computing the income under the head, profit and gains of business and profession - assessee is following the exclusive method of accounting in respect of service tax as noted in its tax audit report. Assessee has not claimed any expense towards service tax liability but has reported it in its Balance Sheet. The same amount is shown from the balance Sheet on 31.03.2008 to the Balance Sheet for the year under consideration - we find force in the submission of the Ld. Counsel and disregard the observation and consideration arrived at by the Ld. CIT for invoking the revisionary proceeding on this issue. Difference between receipt disclosed in the P& L Account and the amount appearing in Form 26AS - Assessee has demonstrated that the difference is on account of inclusion of service tax by the payer of this receipt after subjecting it to TDS. Considering this verifiable fact duly explained by the assessee, we do not find any reason that revisionary proceeding is justified to hold the order being erroneous and prejudicial to the interest of revenue on this issue also. Various expenses claimed by the assessee and no TDS deposited thereon despite reporting of TDS liability in the balance sheet as at 31.03.2010 - There is nothing on record to appreciate the fact about the deposit of this TDS liability and also the extent to which TDS has been done on these expenses claimed by the assessee. The mere assertion by the assessee which also is general in nature that “almost 50% of this amount is reimbursed expenses” does not justify its claim made before the ld. CIT as well as before us. Accordingly, this being an issue purely on facts which can be verified from the records of the assessee, we find it proper to sustain the order of Ld. CIT(A) on this specific issue for the purpose of examination and verification of the details and documents which may be placed by the assessee to substantiate its claim. Accordingly, on the first issue raised by the Ld. CIT in the revisionary proceeding as noted above, we hold the order of Ld. CIT u/s. 263 as justifiable. Appeal of the assessee is partly allowed.
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