Mohmed Hasib Tejamul Shaikh Vs ITO (ITAT Surat)
ITAT Surat held that when any expense is not claimed, no disallowance is permissible. Accordingly, disallowance u/s. 43B on account of unpaid service tax not warranted as the same is not claimed as deduction in P&L account.
Facts- Vide the present appeal, the appellant has contested disallowance u/s. 43B of the Income Tax Act, 1961 on account of unpaid service tax. Assessee submits that in the computation of income, the assessee has not claimed deduction of unpaid service tax liability of Rs. 14,43,922/-, therefore, there is no question for such disallowance by Assessing Officer. The Assessing Officer and the ld. CIT(A) failed to appreciate such fact that when any expense is not claimed, no such disallowance is permissible.
Conclusion- Held that the CPC/Assessing Officer while processing the return of income, disallowed unpaid service tax liability on the basis of reference in audit report/ Form-3CD. The ld. CIT(A) confirmed the action of CPC/Assessing Officer by taking view that the assessee claimed that they are following mercantile system of accounting and followed exclusive method of the purpose of accounting of service tax but no evidence was filed before him, even in the audit report there is no such reference. Before me, the ld. AR of the assessee vehemently argued that no such deduction is claimed by assessee in his P&L account. Considering the fact that the assessee has not claimed such deduction in his P&L account, therefore, no disallowance is warranted.
