TMI Blog2020 (2) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... nd consider the same in accordance with law. Since the CIT(A) has already given a direction to consider the above claim of the assessee, not find it necessary to give any further directions on this issue. - ITA No.3417/Bang/2018 - - - Dated:- 30-1-2020 - Shri Chandra Poojari, Accountant Member For the Appellant : Sri.Mukesh Kumar, CA For the Respondent : Sri.Ganesh R.Ghale, Standing Council for DR ORDER This appeal filed by the assessee is directed against the order of the CIT(A), dated 25.10.2018. The relevant assessment year is 2014-2015. 2. This is the second round of this appeal before the Tribunal. In the first round, the Tribunal vide its ex parte order dated 18.01.2019, dismissed the appeal of the assessee. Thereafter, the assessee filed miscellaneous petition and the Tribunal vide its order in MA No.80/Bang/2019 dated 13.09.2019, recalled its earlier order dated 18.01.2019 for fresh adjudication. Hence, this appeal is before the Tribunal for the second round. 3. The assessee has raised the following grounds:- 1. The impugned order passed by the learned Commissioner of Income-tax[Appeals] and that of the learned assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es leave of this Hon ble Tribunal to add, alter, modify delete or substitute any or all of the above grounds of appeal as may be necessary at the time of hearing of the appeal. 11. For these and other grounds that may be urged at the time of hearing of appeal, the Appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. 4. The facts of the case are that the assessee is a resident company registered under the Companies Act, 1956, following mercantile method of accounting, carrying on the business of IT enabled services. The assessee has filed its return of income for the assessment year 2014-2015 on 29.11.2014, declaring Income at Rs.Nil, after setting of brought forward losses of ₹ 9,34,983 and paid applicable taxes of ₹ 61,116 u/s 115JB of the I.T.Act. The assessee s case was taken up for scrutiny u/s 143 and notice was issued u/s 143(2) on 28.08.2015 to the assessee by the A.O. The assessee filed the details as called for by the A.O. in response to notice u/s 143(2). Thereafter, the A.O. concluded the assessment by determining the total income at ₹ 58,17,228 by disallowing service tax collected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. The learned DR also relied on the following orders:- (i) M/s.Hemkunt Infratech (P) Ltd. v. Deputy Commissioner of Income-tax [ITA No.6683/Del/2017 order dated 23.03.2018] (ii) Madhya Gujarat Viz. Co. Ltd. v. ITO [ITA No.2583/Ahd/2010 order dated 09.11.2016] (iii) M/s.Wyzmiundz Solutions Pvt. Ltd. v. ITO [ITA No.3417/Bang/2018 order dated 18.01.2019] (iv) M/s.Bartronics India Ltd. v. ACIT [ITA No.2188/Hyd/2011 ITA No.2189/Hyd/2011 order dated 31.05.2012, wherein held as under:- 38. We have heard both the parties and perused the material on record and carefully considered assessment order and CIT(A) order. Admittedly the assessee has not paid the service as required under the provisions of section 43B which is also very much covered u/s 43B. The provisions of section 43B is very clear and it states that any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force . Therefore, even service tax is liability which covers u/s 43B and non-payment the same within the stipulated time as specified under section 43B attracts disallowances. Accordingly, we upheld the disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that the fact remains that service tax collected by the assessee but not paid to the Government account up-to the end of the financial year or even up-to the date of filing of the return of income and, thus, by not including this amount in its service, it had clearly made a claim indirectly. As rightly highlighted by the CIT(A), the assessee s plea that sales-tax was different from service tax cannot be accepted in the present circumstance as what the assessee was a firm of Chartered Accountants is selling is services and not goods, so the tax applicable is service tax which stands on the same bracket as sales tax in terms of services rendered as sales tax holds for goods sold. We have also observed that the AO had pointed out that the said amount has been included as business receipts in its TDS Certificates and as such, the same should have been included in its receipts. This has not been precisely done by the assessee. The case laws relied on by the assessee is dealt with as under: (i) ACIT v. Real Image Media Technologies (P) Ltd. (ITATChennai): 7.2.1 The assessee was running a recording and dubbing studio, production of advertisement, films and television ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t come to the rescue of the assessee. (ii) CIT v. Noble and Hewitt India (P) Ltd (Del) 7.2.2 The Hon ble Delhi High Court was predominantly concerned with the disallowance of deduction by invoking the provisions of section 43B of the Act. The Hon ble Delhi High Court was not considering the issue whether the service tax collected and the remaining unpaid till the due date of furnishing of the return forms the part of the total income for the current year. (iii) DCIT v Manish M Chheda 29SOT 138 Mumbai ITAT 7.2.3 In the above case, the Hon ble Mumbai Tribunal was considering the applicability of section 28(iv) of the I T Act. In the instant case, it is an admitted fact that during the course of assessee s profession, a sum of ₹ 29,60,000/- was realised/collected as service tax payable and the same is not capital receipt. The moment the service tax is realised, it becomes payable to the Govt. account and if it is not paid, it partakes the character of income of the assessee, since the assessee could utilise this amount in any manner whatsoever, there is no restriction placed on its utilisation. This is amply clear from the TDS certificate furnished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee; and (ii) further adjusted to include the amount of any tax, duties, cess or fees, by whatever name called, actually paid or incurred by the assessee, to bring the goods to the place of its location and condition, as on the date of valuation. As per the explanation under the said clause, it is pointed out that for the purpose of this section, any tax, duties, cess or fees, by whatever name called, under any law for the time being in force, shall include all such payments, notwithstanding any right arising as a consequence to such payments. Sub-clause (b) talks of interest received by the assessee on compensation or enhanced compensation, which is not relatable to the issue before us. The aforesaid provisions of section 145A of the Act have been substituted by the Finance (No.2) Act, 2009 w.e.f. 01.04.2010. Prior to its substitution, which was inserted by the Finance (No.2) Act, 1998 w.e.f. 01.04.1999, the section provided the provision relatable to the valuation of purchase and sale of goods and inventory, for the purpose of determining the income chargeable under the head profits and gains of business or profession and no clause (b) was provided i.e. in respect of income rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n force, or 8. Rule 4 of the CENVAT Credit Rules, 2004 reads as under : Rule 4. Conditions for allowing CENVAT credit.- (1) The CENVAT credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service: Provided that in respect of final products, namely, articles of jewellery falling under heading 7113 of the First Schedule to the Excise Tariff Act, the CENVAT credit of duty paid on inputs may be taken immediately on receipt of such inputs in the registered premises of the person who get such final products manufactured on his behalf, on job work basis, subject to the condition that the inputs are used in the manufacture of such final product by the job worker. (2) (a) The CENVAT credit in respect of capital goods received in a factory or in the premises of the provider of output service at any point of time in a given financial year shall be taken only for an amount not exceeding fifty per cent. of the duty paid on such capital goods in the same financial year: Provided that the CENVAT credit in respect of capital goods shall be allowed for the whole amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds, which the manufacturer or provider of output service claims as depreciation under section 32 of the Income-tax Act, 1961( 43 of 1961). (5) (a) The CENVAT credit shall be allowed even if any inputs or capital goods as such or after being partially processed are sent to a job worker for further processing, testing, repair, re-conditioning, or for the manufacture of intermediate goods necessary for the manufacture of final products or any other purpose, and it is established from the records, challans or memos or any other document produced by the manufacturer or provider of output service taking the CENVAT credit that the goods are received back in the factory within one hundred and eighty days of their being sent to a job worker and if the inputs or the capital goods are not received back within one hundred eighty days, the manufacturer or provider of output service shall pay an amount equivalent to the CENVAT credit attributable to the inputs or capital goods by debiting the CENVAT credit or otherwise, but the manufacturer or provider of output service can take the CENVAT credit again when the inputs or capital goods are received back in his factory or in the premises of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of this Chapter or the rules made thereunder, and has collected any amount in excess of the service tax assessed or determined and paid on any taxable service under the provisions of this Chapter or the rules made there under from the recipient of taxable service in any manner as representing service tax, shall forthwith pay the amount so collected to the credit of the Central Government. (2) Where any person who has collected any amount, which is not required to be collected, from any other person, in any manner as representing service tax, such person shall forthwith pay the amount so collected to the credit of the Central Government. (3) Where any amount is required to be paid to the credit of the Central Government under sub-section (1) or sub-section (2) and the same has not been so paid, the Central Excise Officer shall serve, on the person liable to pay such amount, a notice requiring him to show cause why the said amount, as specified in the notice, should not be paid by him to the credit of the Central Government. (4) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom the notice is served under subse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provider of taxable service receives a payment up to rupees one thousand in excess of the amount indicated in the invoice, the point of taxation to the extent of such excess amount, at the option of the provider of taxable service, shall be determined in accordance with the provisions of clause (a). Explanation - For the purpose of this rule, wherever any advance by whatever name known, is received by the service provider towards the provision of taxable service, the point of taxation shall be the date of receipt of each such advance. 13. After considering the above provisions, it is clear that the assessee has to pay service tax within due date as set out under the above provisions either by way of cash/cheque or by way of availing CENVAT credit as per Rules as stated above, but the assessee did not do so. The liability of service tax had also arisen as per the point of Taxation Rules, as stated above. 14. Now, we have to examine the case of the assessee in the light of the above provisions. During the impugned year, the assessee has credit balance of service tax payable as on 31.03.2013 of ₹ 1,16,09,924/- which was to be paid upto 31.03.2013 by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of section 43B of the Act and the present provisions of section 145A of the Act cannot be applied in view of non obstante clause in section 43B of the Act. 6.3 However, the assessee raised an alternative plea before us that it should be allowed on actual payment in the assessment year in which it was actually paid. We accept this plea of the assessee and direct accordingly. 7. The next ground is regarding the disallowance of brought forward loss of ₹ 9,34,983 arises due to additions made u/s 43B 36(1)(va) for the financial years 2012-2013 and 2013- 2014 relevant to the assessment years 2013-2014 and 2014- 2015. 8. According to the assessee, it is consequential and the income of the assessee for those years has computed after giving effect to the appellate orders for the respective assessment years. On this count, the CIT(A) also has given direction to the A.O. to verify the brought forward losses and consider the same in accordance with law. Since the CIT(A) has already given a direction to consider the above claim of the assessee, I do not find it necessary to give any further directions on this issue. 9. In the result, the appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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