TMI Blog2013 (6) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... 32,96,449/-. He also declared agricultural income of ₹ 4,87,796/-.The AO passed an order u/s 142(3) on 24.12.2009, assessing the total income at ₹ 64,63,425/- inter alia making a disallowance u/s 43B as well as on account of bogus creditors, aggrieved the assessee carried the matter in appeal. The first appellate authority granted part relief. 3. Aggrieved with the order of first appellate authority the revenue filed this appeal on the following grounds: 1. On the facts and in the circumstances of the case, the ld. CIT (A) erred in deleting addition of ₹ 2,12,975/- made by the AO under section 43B of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case, the ld. CIT (A) erred in deleting addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ording to this rule, the amount of Service Tax becomes payable and due to be paid to the Government account by 5th of the next month/quarter in which the payment of the bill amount is received from the recipient of the services by the assessee. As the amount of ₹ 2,12,975/- had not become payable and due in terms of the provision of Rule 6 of the Service Tax law, section 43B of the Act was not applicable in the appellant s case. 6. In support of the order of the ld. CIT (A) the assessee relies on the following decision of the Tribunal. ACIT Vs. Real Image Media Technologies (P) Ltd. 306 ITR (AT) 106 (Chennai) in this case it is held as follows: For the purpose of determining income under the head Profits and gains of busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effects the sales in the course of an inter-state trade or commerce. This shows that the liability to make payment of sales tax is not dependent on the fact whether such dealer has received the payment from the customer of the goods or not. The liability is fastened to the transaction of sales and once such sale is effected, the dealer becomes liable to pay. Service tax under section 68 of the Finance Act, 1994, has to be paid in the manner prescribed under rule 6 of the Service Tax Rules, 1994. Under rule 6 of the Rules, a service provider becomes liable to make the payment of service tax by the fifth of the month immediately following the calendar month in which the payments are received towards the value of taxable service. The first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax at ₹ 5,72,374/- as on March 31, 2002 in its balance sheet. The Assessing Officer added a sum of ₹ 5,72,374/- to the income of the assessee being service tax not paid before the due date for filing the return of income. The Commissioner (Appeals) deleted the addition made. On appeal by the Department: Held, dismissing the appeal, that a service provider was merely acting as an agent of the Government and was not entitled to claim deduction on account of service tax. Since service tax was not payable by the assessee, the rigour of section 43B of the Act could not be applied to the case of the assessee and the Commissioner (Appeals) had rightly deleted the addition made. 7. Applying the proposition laid down in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee (hereinafter referred to as the first-mentioned person) and subsequently during any previous year,- (a) the first-mentioned person has obtained, whether in cash or in any other manner whatsoever, any amount in respect of such loss or expenditure or some benefit in respect of such trading liability by way of remission or cessation thereof, the amount obtained by such person or the value of benefit accruing to him shall be deemed to be profits and gains of business or profession and accordingly chargeable to income-tax as the income of that previous year, whether the business or profession in respect of which the allowance or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [(iv) where there has been a demerger, the resulting company.] 10. The ld. CIT (A) at Para 71 brought out the following case laws: Bombay Dyeing MFG. Co. Ltd. Vs. State of Bombay (AIR 1958 SC 328,335) CIT Vs. Vipro Foundary Engineers (P) Ltd. 245 ITR 21 (Mad.) CIT Vs. Emkay Glass Works (2007) 288 ITR 582 (All.) Narain Chettiar Industries Vs. ITO (2005) 277 ITR (Mad.) CIT Vs. G.P. International Ltd. (2010) 229 CTR 86 (P H) CIT Vs. Site Devi Juneja (2010) 187 Taxman 96 (P H) CIT vs. Jaipur Jewellers (Exports) (2010) 187 Taxman 169 (Delhi) CIT Vs. Sugauli Sugar Works (P) Ltd. (1999) 236 ITR 518 (SC) CIT Vs. Rashmi Trading (1967) 103 ITR 312 (Guj.) Travancore Chemical and Manufacturing Co. Ltd. Vs. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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