Ita/421/2018 Of Sri. Arun Kumar M B v. The Income Tax Officer

Digitally signed byLAKSHMI TLocation: HIGH COURTOF KARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 15 DAY OF NOVEMBER, 2022 PRESENT THE HON'BLE MR JUSTICE P.S.DINESH KUMAR AND THE HON'BLE MR JUSTICE T G SHIVASHANKARE GOWDA INCOME TAX APPEAL NO. 421 OF 2018 BETWEEN: 1. SRI. ARUN KUMAR M.B., S/O LATE M.B.VARADARAJ, AGED ABOUT 55 YEARS, NO.123, 1 FLOOR, 2 PHASE, 2 STAGE, 6 MAIN, MAHALAKSHMIPURAM, BANGALORE – 560 086. PAN NO.AIHPK575ID …APPELLANT (BY SMT.JINITA CHATERJEE, ADVOCATE FOR SRI.S.PARTHASARATHI, ADVOCATE) AND: 1. THE INCOME - TAX OFFICER, WARD-8(3), PRESENTLY, THE INCOME TAX OFFICER, WARD-6(2)(2), ROOM NO.311, 3 FLOOR, BMTC BUILDING, 80 FEET ROAD, 6 BLOCK, KORAMANGALA, BANGALORE – 560 095. …RESPONDENT (BY SRI. K.V.ARAVIND., SENIOR STANDING COUNSEL) THIS ITA / INCOME TAX APPEAL UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 23.02.2017, VIDE ANNEXURE-A, PASSED IN ITA NOS.1417, 1418 & 1419/BANG/2016, FOR THE ASSESSMENT YEAR-2009-10, 2011-2012 AND 2012-2013, PRAYING TO (A) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE; (B) ALLOW THE APPEAL AND SET-ASIDE THE ORDER OF THE INCOME-TAX APPELLATE TRIBUNAL DATED 23.02.2017, VIDE ANNEXURE-A, BEARING ITA NOS. 1417, 1418 & 1419/BANG/2016 FOR THE ASSESSMENT YEARS 2009-2010, 2011-2012 AND 2012-2013. THIS APPEAL, COMING ON FOR HEARING, THIS DAY, P.S. DINESH KUMAR J, DELIVERED THE FOLLOWING:- JUDGMENT This appeal directed against the order dated 23.02.2017 in ITA Nos. 1417,1418 and 1419/Bang/2016 for the assessment years 2009-10, 2011-12 and 2012-13 passed by the Income Tax Appellate Tribunal, Bangalore, has been admitted on 11.02.2019 to consider the following substantial questions of law: "1. Whether the service tax collected would constitute income of the Appellant when the same was paid to the Government and the Appellant had maintained separate account in his books of account wherein both collections and payments have been recorded and no part of the payments have been changed-off in the P&L Account? 2. Whether the authorities below were justified in applying the provisions of Section 43B of Act when no part of the payments have been charged-off in the P&L Account?" 2. Heard Smt. Jinita Chatterjee, learned advocate for the appellant-assessee and Shri K.V.Aravind, learned Senior Standing Counsel for the respondent-Revenue. 3. The brief facts of the case are, for the Assessment Years 2009-10, 2011-12 and 2012-13, the assessee had collected gross service commission in a sum of `1,50,62,141/- and offered `1,35,19,682/- to tax being net-service commission received. The Assessing Officer disallowed a sum of `16,25,928/- being the difference between the closing balance of duties and tax as on 31.03.2009 and 31.03.2008 for the Assessment year 2009-10. 4. The Assessing Officer disallowed `16,75,654/-for the Assessment Year 2011-12 and `18,07,270/- for the Assessment Year 2012-13 . 5. Smt. Jinita Chatterjee, submitted that the CIT (Appeals) erred in holding that Section 43(B) of the Income Tax Act, 1961 is applicable only when the taxes are actually paid. She further submitted that the assessee has paid taxes for the Assessement year 2012-2013 as per the Scheme. 6. Shri Aravind, supporting the impugned orders submitted that the assessee has offered the net commission received and not offered the service tax component. 7. In reply, the learned advocate for the appellant/assessee submitted that the service tax offered alone has been paid. 8. In view of the above, the Assessing Officer will have to re-examine the matter with regard to the assessee offering and paying the taxes on the service tax component which was not actually paid during the respective previous years. Therefore, this matter is remitted to the file of the Assessing Officer to examine as to whether the taxes with regard to the service tax component for the respective years so offered have been paid. 6. Shri Aravind, supporting the impugned orders submitted that the assessee has offered the net commission received and not offered the service tax component. 7. In reply, the learned advocate for the appellant/assessee submitted that the service tax offered alone has been paid. 8. In view of the above, the Assessing Officer will have to re-examine the matter with regard to the assessee offering and paying the taxes on the service tax component which was not actually paid during the respective previous years. Therefore, this matter is remitted to the file of the Assessing Officer to examine as to whether the taxes with regard to the service tax component for the respective years so offered have been paid. 9. In view of the matter having been remitted to the Assessing Officer, the substantial questions of law are not required to be answered and hence, not answered. The appeal is disposed of. No costs. Sd/- JUDGE Sd/- JUDGE TL List No.: 1 Sl No.: 35