The Income Tax Appellate Tribunal ( ITAT ), Cochin Bench, has recently in an appeal filed before it, held that, stamp duty collected from customers shall be treated as trading receipt under 43b(a), and that the same is allowable.
The aforesaid observation was made by the ITAT, when an appeal was filed before it by the asssessee, Vertex Securities Ltd., as against the order of the Commissioner of Income Tax (A) dated 3.8.2020, for the assessment year 2013-14.
The grievance of the assessee being with regard to the addition of Rs.4,72,412/- on account of stamp duty payable to Government, which had not been paid. The facts of the case were that the assessee had collected a stamp duty, which formed part of bill raised to the customer, which was not paid to the Government and was claimed as an expenditure.
Since the assessee collected the stamp duty but failed to pay the same to the Government, it was treated as the income of the assesse, and it is against the same, that the assessee has preferred the instant appeal before the ITAT.
With Shri Jameskutty Antony, the A.R. for the assessee, relying upon the judgement in the case of CIT Vs. OEN India Ltd, which held that excise duty is to be excluded from total turnover for the purpose of computation of deduction u/s 80HHC of the Income-tax Act,1961 ,it was further submitted by him by relying upon the judgement in the case of Magadh Stock Exchange Vs. CIT , that section 43B of the Act cannot be applied to the stamp duty payable.
However, on the other hand, with Smt. J.M. Jamuna Devi, Sr. DR for the Revenue relying up on the order of CIT(A), the ITAT Bench consisting of Beena Pillai the Judicial Member, and Chandra Poojari, the Accountant Member observed as follows:
“In this case, the assessee has collected an amount of Rs.4,72,412/- towards stamp duty and same has not been paid to the Government within the stipulated date of filing of return u/s 139(1) of the Act. The Ld. A.R. made a plea that this amount has been paid within the due date of filing return of income without furnishing any evidence to support the same.”
“Once the assessee has collected the said amount from the customers, it is incumbent upon the assessee to pay the same before due date of filing return of income. However, assessee shown it as a liability in its balance sheet and having enriched by said amount, the assessee is liable to be included in the income of the assessee.”, dismissing the assessee’s claim the ITAT Bench ruled.
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