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Judgment
PER KRINWANT SAHAY AM
Appeal in this case has been filed by the revenue against the order dated 03.10.2026 passed by the Ld. CIT(A)/NFAC, Delhi for the A.Y. 2023-24. Grounds of appeal are as under :-
1.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of the assessee by deleting the addition made by the AD amounting to Rs. 14,53,09,773/- on account of GST Payable.
2.Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in holding that GST/service tax collected by the assessee need not be routed Trough the Profit & Loss Account, ignoring the mandatory provisions of section 145A of the Act.
3.Whether on the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in holding that the provisions of section 43B of the Act are not applicable in the present case, without appreciating that once statutory tax liabilities are required to be routed through the Profit & Loss Account as per section 145A of the Act, the provisions of section 43B of the Act automatically come into operation.
Brief facts of the case are that the assessee is a manpower service company. Return of income was filed on 31.10.2023 returning total income of Rs.1,92,70,940 after claiming the entire business income of Rs. 37,50,48,809 as deduction under section 80JJAA.
While completing assessment, the AO made the following additions/disallowances: (1) The GST payable amounting to Rs.14,53,09,773 was disallowed u/s 43B. (2) Provision made for the interest payable on statutory dues (Rs. 10 crores) was disallowed. (3) Penalties paid amounting to Rs. 12,77,249 was disallowed u/s 37(1). Total income was assessed at Rs.26,58,57,962.
At the very outset the Ld. DR submitted before the Bench that the only issue involved in this case is the allowance of assessee’s appeal by the Ld. CIT(A) on the ground that GST payable does not get reflected in the P & L account of the assessee, therefore, it is not to be considered for calculating the income of the assessee and accordingly he requested the Bench to quash the order of the Ld. CIT(A) on this issue. 4. Per contra the Ld. Counsel for the assessee in his written submissions submitted that the issue has been dealt with by various co-ordinate benches of ITAT such as case laws discussed by the Ld. CIT(A) in his order is as under :-
(a)In DCIT. vs. ATS Real Estate Builders P. Ltd. ITA No.1207/DEL/2024 (A.Y.2020- 21
(b)CIT Vs. vs Noble And Hewitt (I) (P) Ltd.
(c)Munjal Auto Industries Ltd Vs DCIT (ITAT Ahmedabad). I.T.A. No. 878/Ahd/2024 (Α.Υ.2018-19),
(d)DCIT vs. Real Image Media Technologies Pvt. Ltd. [(2012) 23 taxmann.com 258 (Chennai-Trib.)],
(e)Maruti Suzuki India Ltd. vs. DCIT [(2011) 136 TTJ 194 (Del)]
Considering all the legal positions and various orders /pronouncements by different coordinate Benches of the Tribunal. The Ld. CIT(A) has correctly and appropriately given his findings on this issue.
We have considered the findings given by the AO and the assessment order and the Ld. CIT(A) in the appellate order and we find that the Ld. CIT(A) has written a speaking order on this issue keeping in view different judicial pronouncements given by the coordinate Benches of the Tribunal. Accordingly, in our considered view there is no need to disturb the finding given by the Ld. CIT(A) on this issue. Thus, Revenue’s appeal is dismissed.