TMI Blog2015 (12) TMI 1818X X X X Extracts X X X X X X X X Extracts X X X X ..... d, the said liability as deduction on the ground that the accounts have been maintained on mercantile basis. The CBDT has observed that on one hand the tax payers have claimed the deduction merely on the basis of accrual of liability but on the other hand, disputed the liability and did not discharge the obligation of payment of the tax. For some reasons or the other, the liability is disputed and not paid. This aspect has been considered by several Courts and came to the conclusion that in a situation when deduction has not been claimed and a separate account has been maintained, then disallowance u/s 43B of the IT Act should not be made. In the case of CIT Vs Noble Hewitt (India) (P) Ltd. [ 2007 (9) TMI 238 - DELHI HIGH COURT] , the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Per Mukul K. Shrawat, J.M. This is an appeal filed by the Revenue arising from the order of the learned CIT (A), Raipur dated 26-06-2012 for assessment year 2009-10. The grounds raised by the Revenue are hereby decided as follows:- 1. Whether in law and on facts circumstances of the case, the CIT (A) has erred in deleting t he addition of ₹ 11,47,255/- made by the AO on account of unpaid Service Tax. 2. Facts in brief as emerged from the corresponding assessment order passed u/s 143(3) of the IT Act dated 26th December, 2011 were that the assessee in individual capacity is proprietor of M/s. Amkay Construction. The assessee is engaged in civil construction contract work. Prima-facie, observa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ements and Tax Audit Report of the appellant, particularly, the remark of the auditor in the Tax Audit Report that there is no change in the method of accounting followed by the appellant in the preceding year. As per generally accepted accounting principle, the indirect taxes can be accounted for in two different ways viz. The Inclusive Method (wherein the taxes are shown as revenue and corresponding provision/charge is made in Profit Loss Statement) Exclusive Method (wherein the indirect taxes are shown in the liability side and tax paid are debited to the liabilities account instead of debiting the Profit Loss statement). In the instant case, the appellant has been, admittedly, consistently following the Exclusive Method of Accountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any deeming fiction to treat the taxes collected by the appellant as income. 4. Hence, after refering to the case laws namely S. B. Foundry (1990) 185 ITR 555 (All.) and India Carbon Ltd. Vs IAC Anr. (1993) 200 ITR 759 (Gau) it was held that the admitted factual position was that the assessee had not claimed any amount by way of service tax as a deduction, therefore, there was no question of disallowance of any tax or dues u/s 43B of the IT Act. Against the relief, as granted by the learned CIT (A), now, the Revenue is in appeal before us. 5. On the date of hearing, no one was present from the side of the respondent assessee. From the side of the Revenue, learned DR Smt. Shital S. Verma appeared and supported the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been debited to profit loss account as an expenditure nor claimed any deduction in respect of the said amount then, the question of disallowance u/s 43B of the IT Act does not arise. Respectfully, following this decision, we hereby hold that there was no fallacy in the view taken by the learned CIT (A). The same is hereby confirmed and ground No.1 of the appeal of the Revenue is, therefore, dismissed. 7. Ground No.2:- 2. Whether in law and on facts circumstances of the case, the CIT (A) has erred in deleting the addition of ₹ 17,000/- made by the AO on account of donation treating the same as personal expenditure . The assessee has debited an expenditure of ₹ 17,000/- as donation which accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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