ITAT Upholds Deletion: Service Tax Declaration Discrepancy in Form 26AS and P&L Account

ACIT Vs BBH Communications India Private Limited (ITAT Mumbai)

The Income Tax Appellate Tribunal (ITAT) Mumbai addressed a significant case involving ACIT and BBH Communications India Pvt Ltd concerning discrepancies between Form 26AS and the Profit & Loss Account. The dispute centered on the declaration of service tax amounts and their impact on income calculations. This article provides a comprehensive analysis of the ITAT’s decision and its implications.

Detailed Analysis:

1. Assessment Proceedings: BBH Communications India Pvt Ltd, an advertising agency solutions provider, faced scrutiny over discrepancies in income declaration and tax deductions. The Assessing Officer (AO) noted variations between the figures presented in the Profit & Loss Account and those reflected in Form 26AS.

2. Nature of Discrepancy: The primary divergence stemmed from the treatment of service tax amounts. While the company’s Profit & Loss Account recorded net income, excluding service tax, Form 26AS displayed gross income, including service tax. This discrepancy led to variations in the declared income and TDS amounts.

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