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2022 (5) TMI 1127 - AT - Income TaxDisallowance of sales tax (CGST and SGST) u/s. 43B - Tax audit report u/s. 44AB along with Form 3CD was filed and under column 26 of this report auditor has mentioned that CGST and SGST has not been paid before the due date of filing Income Tax return u/s. 139(1) - Assessee stated that the alleged sum of GST was not claimed as an expenditure in the profit and loss a/c and therefore, disallowance u/s. 43B is not called for - HELD THAT:- The assessee has consistently claimed that the said sum has not been claimed as an expenditure in the profit and loss a/c and the same is mentioned under the current liabilities head of the balance sheet as on 31.03.2018. This fact is verifiable from the audited profit and loss a/c and balance sheet. The assessee has not routed GST through its profit and loss a/c nor it has claimed as an expenditure on any purchases made during the year in its profit and loss a/c nor any expenditure has been claimed towards any excess GST paid during the year. The audited balance sheet shows that the alleged sum was a current liability which the assessee has to pay with the Government treasury in the due course as per the rules and regulations governing GST. This observation of the Ld. CIT(A) that provisions of section 43B is made to ensure that payment to the Government should be paid in time and the appellant "should not use the money due to Government" is devoid of merit as the issue in hand relates to computation of income earned by the assessee and claim of certain expenditures as enumerated in section 43B of the Act which can be claimed only on actual payment basis. The liability to pay the outstanding GST and the process of recovery of such amount and other penal provisions for late payment of GST are governed by the respective rules and regulations provided under Goods and Services Tax Act. Under the given facts and circumstances of the case and also respectfully following the consistent view taken by this Tribunal in the case of Kankani construction (P) Ltd. [2018 (1) TMI 1684 - ITAT KOLKATA] and M/s. TSG Global Services Pvt. Ltd. [2020 (7) TMI 777 - ITAT KOLKATA] are of the considered view that since the assessee has not claimed the alleged amount as an expenditure in the profit and loss a/c, no disallowance could be made u/s. 43B of the Act. We accordingly reverse the findings of the Ld. CIT(A), delete the disallowance u/s. 43B and allow the grounds of appeal raised by the assessee.
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