TMI BlogALLOWABILITY OF SERVICE TAX PAIDX X X X Extracts X X X X X X X X Extracts X X X X ..... SERVICE TAX QUERY ( for allowability of service tax of previous years paid in current year by an individual, in his Income tax return or not. An individual has given his property on rent from 01/07/06 @ Rs. Twenty lacs alongwith 5 % commission on sale per month inclusive of all taxes at present and in future, if any, as per agreement. After levy of service tax w.e.f. 01/07/07, we raised bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on tenant for Rs. 2000000/- plus services tax leviable at that time. But he refused to give service tax by quoting the clause mentioned in the agreement i.e. Rent is inclusive of all taxes leviable at present as well as in future if any. We paid service tax for the period from 01/07/07 to 31/03/08 and claimed the same in our Income tax return as under: 1. Rent inclusive of all taxes recd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000000*9 18000000 2. 5% commission on sale 2000000 3. Less; Property tax paid 100000 4. Service Tax @ 12.36% Paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2189070 5. Actual rental income shown in Income tax return 17710930 From 01/04/08, no service tax was paid in the light of first judgement on service tax received from Delhi high court and we filed our income tax return for the year 01/04/08 to 31/03/09 by taking income of Rs. 2000000X12 (rs. 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000000/-).Plus 5% commission on sale amounting to Rs.3000000/-. Total Rs.27000000/-. Now our query is : As per finance budget 2012-13, the govt. has made amendment in Section 80 of the Finance Act, that no penalty to be imposed if service tax payable upto 06/03/12 alongwith interest to be paid within six months from the date of assent from the president on the finance bill. We paid service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax for the year 2008-09 amounting to Rs.27 lacs without interest amounting of Rs.15 lacs on 24/03/12 and now we want to get benefit in our I.T. return for the A.Y. 2012-13. Will it be allowable to us? And if yes whether Rs.27 lacs or Rs. 27-15=Rs.12 lacs only. Please give your expert opinion on the matter by quoting any notification or judgement etc. - Reply By Surender Gupta - The Reply = ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... First of all I would like to say that despite the provision in Finance Act, 2012 , that in case of renting of immovable property, if service tax is paid with interest no penalty would be leviable, I am of the opinion that one must study the provisions of section 73 of Service Tax (Chapter V of the Finance Act, 1944 . wherein it is stated that in case there is no willful evasion, no demand woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be raised beyond one year. Since your case was related to FY 2008-09, you have not paid ST in view of decision of honorable High Court, no allegation would succeed to prove malafide intention on your part. In any case, since you have deposited Service Tax liability in March 2012, a deduction should be allowed under income tax under section 37(1) read with section 43B of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961, for both the amount i.e service tax as will as interest. - Reply By S.C. WADHWA - The Reply = Dear Surinder Gupta, We are filing I.T.Return of Individual rental income under the head " Income from house property". Hence interest paid on service tax will not qualify as an expence u/s 37(1) . Whether service tax being an indirect tax will be allowable u/s 43B is not known to u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Please clerify this. S.C.WADHWA - Reply By Surender Gupta - The Reply = Oh yes, I have mentioned Section 43B considering the income is taxable under the head business or profession. Since in this case, you are falling under the head income from house property, you have no option to claim deduction u/s 43B . However, by revising the return u/s 154 you may get the benefit. But in thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regard, you need to discuss your Income Tax Advisor to know whether you are eligible to revise the return u/s 154 or not. - ALLOWABILITY OF SERVICE TAX PAID - Query Started By: - S.C. WADHWA Dated:- 7-7-2012 Income Tax - Got 3 Replies - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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