PCIT Mumbai Vs. Tops Security Limited (Bombay High Court)
Bombay 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 assesse. Hence the liability to pay service tax into the Treasury will arise only upon the assesse receiving the funds form the customer and not otherwise.
FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:
1. The Revenue’s appeals challenge the orders of the Income Tax Appellate Tribunal, Bench at Mumbai.
2. In all these appeals, the Revenue proposes a common question and terms it to be a substantial question of law. The common question reads as under:-
“Whether, in law and on the facts and in the circumstances of the case, the Honible ITAT was justified in holding that the service tax though debited to the profit and loss account but not credited to the Central Government cannot be disallowed under Section 43B of the Income Tax Act, 1961?”
3. The facts and circumstances in Income Tax Appeal No.733 of 2015 are sufficient for the purposes of the final order that we propose to pass in these appeals.
4. This appeal is for the Assessment Year 2006-07.
