Case Law Details
Wyzmindz Solutions Pvt. Ltd. Vs ITO (ITAT Bangalore)
Conclusion: Service tax collected by assessee and not paid to the Government exchequer before the due date of filing of return was to be disallowed under section 43B and the same should be allowed on actual payment in the assessment year in which it was actually paid.
Held: Assessee was a resident company following mercantile method of accounting, carrying on the business of IT enabled services. Assessee had filed its return of income declaring Income at Rs.Nil, after setting of brought forward losses and paid applicable taxes u/s 115JB of the I.T.Act. Assessee’s case was taken up for scrutiny u/s 143 and notice was issued u/s 143(2) to assessee by AO. AO concluded the assessment by determining the total income after disallowing service tax collected by the assessee u/s 43B of the Act. It was held that the service tax collected by assessee and not paid to the Government exchequer before the due date of filing of return, was to be disallowed, though it was not charged to the profit and loss account and it attracted the provisions of section 43B and the present provisions of section 145A could not be applied in view of non obstante clause in section 43B of the Act. However, it should be allowed on actual payment in the assessment year in which it was actually paid.
FULL TEXT OF THE ITAT JUDGEMENT
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.
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