Amusement Tax paid before the Due Date of Filing of Income Tax Return is Eligible for Deduction: ITAT [Read Order]

The Kolkata bench of Income Tax Appellate Tribunal recently ruled that Amusement Tax paid before the due date of filing of Income Tax Return is eligible for deduction under the Income tax Act, 1961.

The bench comprising of Judicial Member Aby. T. Varkey and Accountant Member Shri M.Balaganesh ruled so while allowing the appeal of assessee against the order of the first appellate authority who denied the benefit to them.

In instant appeal assessee is an individual engaged in the business of running of cinema hall, the ground to be decided in this appeal is as to whether the CIT(A) was justified in upholding the addition of Rs. 25,61,012/- on account of amusement tax in the facts and circumstances of the case.

The sole issue in the present appeal was assessee had shown an amount of amusement tax payable under the head ‘current liabilities’ and the sum represented the amusement tax collected from the various cine goers along with the sale of tickets .

When this matter came to the notice of authority with regard to liability to pay the said amusement tax to the competent authority, the assessee chose to retain the same as liability in its books of accounts.

Since the amount treated as income of the assessee by the AO, However, he found that the assessee had duly remitted the sum towards amusement tax on or before 30.09.2012 and accordingly granted deduction for the same u/s 43B of the Act. Hence, he added the sum of Rs. 25,61,012/- to the total income of the assessee. This action of the Ld. AO was upheld by the Ld. CIT (A). Aggrieved, the assessee is in appeal before the tribunal.

The tribunal bench heard rival submission and held that the decision as to whether to treat the amusement tax liability as on 31.03.2011 amounting to Rs. 29,77,066/- as trading receipt cannot be considered in assessment year 2012-13 as it pertains to assessment year 2011-12.

“It is not in dispute that the assessee has already remitted a sum of Rs. 15,25,669/- towards amusement tax on or before the due date of filing the return of income u/s 139(1) of the Act and hence, the assessee is eligible for deduction of the same u/s 43B of the Act,” the bench said.