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2020 (4) TMI 123 - AT - Income TaxDisallowance of service tax u/s 43B - outstanding statutory liability not paid before filing of the return of income - HELD THAT:- Outstanding amount of ₹ 1,25,39,228/- on account of service tax pertains to the period prior to 30-06-2011 rather a sum of ₹ 1,21,38,957/- relates to earlier financial year being 2010-11 and therefore, it was the opening balance of statutory liability as on 01-04-2011. The assessee has not routed the outstanding service tax through its profit and loss account but has taken this amount directly to the balance sheet. Therefore, the assessee has not claimed any deduction on account of said amount of service tax which was neither collected nor paid to the Govt. account. As relying on M/S POWER LINERS VERSUS A.C.I.T., CIRCLE-3, JAIPUR [2018 (1) TMI 512 - ITAT JAIPUR] when the assessee has neither included this amount of service tax in the turnover/ revenue receipts nor claimed as deduction in the profit and loss account then the said amount cannot be disallowed u/s 43B for the year under consideration. The assessee cannot claim deduction of this amount in the subsequent years when it is paid to the Govt. Account by invoking the provisions of Section 43B of the I.T. Act, 1961. In fact, this is a claim allowability of which has to be first decided u/s 28 to 42 and only when the amount is allowable as a deduction under these provisions then the provision of section 43B can be invoked. If the claim is not allowable as the deduction u/s 28 to 42 of the I.T. Act, 1961 then the question of invoking the provisions of section 43B either for disallowance or for claiming the deduction on the event of payment does not arise. The Provisions of Section 43B are only restrictive in nature and not an enabling provision. If the claim is otherwise not allowable as deduction then the same cannot be allowed by invoking the provisions of Section 43B of the Act - we delete the disallowance/ addition made by the AO - Decided in favour of assessee.
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