DCIT Vs Grand Motors (ITAT Raipur)
ITAT Raipur held that disallowance under section 43B of the Income Tax Act towards unpaid VAT liability cannot be sustained since the amount was not claimed as an expenditure in P&L account. Accordingly, appeal of revenue dismissed.
Facts- The assessee is a firm engaged in the business of Automative products. The return of the assessee was processed by CPC and an intimation u/s 143(1) was issued, making therein certain disallowances, thus, enhancing the total taxable income of the assessee at Rs.3,13,35,153/-.
The specific disallowances are made u/s 43B on account of non-payment of liabilities towards VAT for Rs.3,05,92,653/- before the prescribed date of filing the return of income u/s 139(1) of the Act and addition u/s 40(a)(ia) for Rs.7,42,500/-, on account of non-deduction of TDS on rent.
CIT(A) vacated the entire addition towards unpaid VAT liability and restricted addition u/s. 40(a)(ia) to the extent of 30% at Rs. 2,22,750/-. Being aggrieved, revenue has preferred the present appeal challenging deletion of addition towards unpaid VAT liability.
Conclusion- Held that admittedly, the issue in present case qua the admissibility of unpaid VAT liability which was not paid on or before the due date for furnishing the return u/s 139 of the Act, if the same is not charged to P&L Account, the same cannot be disallowed being not claimed as deduction in the books of accounts.
