TMI Blog2014 (3) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... x. The claim of the assessee throughout was that the service tax expenditure has not been debited in P&L Account and since the assessee has not claimed the said amount as expenditure, the question of disallowance u/s 43B of the Act does not arise. We find force in the said contention of the ld AR and we set aside the order of the ld CIT(A) and remand the matter back to the file of the Assessing Officer with a direction to verify the said claim of the assessee that no such expenditure has been debited in its P&L Account, and if the Assessing Officer finds the said claim of the assessee as correct then the question of disallowance u/s 43B does not arise and consequently the Assessing Officer shall delete the said addition and pass fresh asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mainly involved in running of a call center on behalf of ABN Amro Bank during the relevant Assessment Year. The assessee has also done work of collection of debts on behalf of some other banks and companies. Expenses debited to the Profit and Loss Account have been claimed by the assessee. During the assessment proceeding the Assessing Officer found that certain service tax payment was outstanding as on 31.03.2008 and when he compared the service tax return along with service tax payment challans it was found that an amount of ₹ 11,72,233/- which was due to be remitted before the due date was out-standing at the time of filing of the return of income and it has been paid after the due date. When asked to explain the assessee explained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s before the Assessing Officer, and pointed out Section 292BB of the Act and dismissed the said ground of the assessee; and in respect of ground No. 3, the ld CIT(A) was of the view that since the impugned addition was made by the Assessing Officer was based on the admission of the assessee, the said ground also cannot be raised in the appeal preferred u/s 246A (1) and held that such a ground cannot be entertained at all; and advised the assessee to file revision before Commissioner of Income Tax u/s 264 of the Act and dismissed that ground also. Aggrieved by the said order of the ld CIT(A) the assessee is before us. 7. The ld AR submitted that the assessee was not debiting the service tax amount to the Profit and Loss (P L) Account as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounting, the question of disallowing the deduction not claimed would not arise. Learned counsel for the Revenue submits that the Assessee has sought to evade tax under the mercantile system of accounting. We are of the view that it is not for the Revenue authorities to tell the Assessee how to maintain its accounts. We cannot find any fault in the view taken by the Tribunal and find no merit in this appeal. 9. The reasoning given by the ld CIT(A) in not entertaining this ground in the appellate proceeding was on the reasoning that the assessee had offered the sum of ₹ 11,72,233/- for taxation before the Assessing Officer and it was a case where the assessee himself has admitted so before the Assessing Officer. Therefore, the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeded and held that the ground of appeal in which the assessee denied its liability to be assessed at an income of ₹ 11,79,703/- cannot be entertained. However, we do not find that the said explanation given by the assessee in any manner amounts to an admission to tax the said out-standing service tax. The claim of the assessee throughout was that the service tax expenditure has not been debited in P L Account and since the assessee has not claimed the said amount as expenditure, the question of disallowance u/s 43B of the Act does not arise. We find force in the said contention of the ld AR and we set aside the order of the ld CIT(A) and remand the matter back to the file of the Assessing Officer with a direction to verify the said ..... X X X X Extracts X X X X X X X X Extracts X X X X
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