Section 43B does not contemplate liability to pay service tax before actual receipt of the funds

Principal CIT Vs. Tops Security Limited (Bombay High Court) The Assessing Officer was of the view that by virtue of Section 43B of the Income Tax Act, 1961, service tax can be allowed only when paid and therefore the amount is not liable as deduction. On appeal Hon;ble High Court held that Section 43B does not contemplate liability to pay service tax before actual receipt of the funds in the account of the assessee. Hence the liability to pay service tax into the Treasury will arise only upon the assessee receiving the funds and not otherwise. Thus the consideration has to be actually received...