THAR AUTOMOBILES PVT. LTD.,NEW DELHI vs. ITO WARD-25(2), DELHI

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ITA 1217/DEL/2019Status: DisposedITAT Delhi20 May 2020AY 2014-153 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the addition made under Section 43B concerning the brought forward liability from previous years. It also upheld the addition for registration fees collected from customers, finding them to be statutory liabilities not paid within the prescribed time.

What were the facts?

The assessee appealed against the CIT(A)'s order upholding additions made under Section 43B. These additions pertained to a brought forward liability from previous years under "reserve and Surplus of the employees" and registration fees collected from customers.

What were the issues?

Whether the brought forward liability and collected registration fees constitute statutory liabilities that are disallowable under Section 43B if not paid within the prescribed time.

Which sections of the Income-tax Act were involved?

Section 43B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “1-2, SMC”: NEW DELHI

Before: MS SUCHITRA KAMBLE & SHRI PRASHANT MAHARISHI

For Respondent: Shri Pradeep Singh
Hearing: 03/03/2020Pronounced: 20/05/2020

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee against the order of the ld CIT(A)-9, New Delhi dated 09.11.2018 raising the following grounds of appeal:- “1. Ld CIT(A) has erred in law in upholding the addition made u/s 43B of Rs 670742/- being the old brought forward liability from the preceding previous years 2009-10 to 2012- 13 under the ledger Head “reserve and Surplus of the employees” ignoring the assessee’s submission that this was not the liability referred u/s 43B and hence liable to be set aside and quashed and declared non rest in law.

2. Ld CIT(A) has erred in law in upholding the addition made u/s 43B of Rs. 68580/- being the registration fee collected from customers for registration of sold vehicles with the Registrar of Transport Office (RTO) ignoring the assessee’s submission that this was collected as agent of the customers Page | 1 for registration of sold vehicles and it was not the liability referred u/s 43B and hence liable to be set aside and quashed and declared non est in law.”

2.

Brief facts of the case shows that the assessee is a company engaged in the business of trading of Honda Two wheelers. It filed its return of income on 20.11.2014 at Rs. Nil. The assessment u/s 143(3) was made on 22nd December 2016 on Rs. 4476841/-. The assessee preferred an appeal before the ld CIT(A) where partial relief was given. Therefore, the assessee is in appeal before us on the issues on which additions are sustained.

3.

At the time of hearing the ld counsel of the assessee requested for adjournment, as he could not prepare the matter. However, looking to the issues involved, the appeal is decided on the merits of the case as per information available on record the issues involved in these appeal are as clear as water of Ganges in favour of the assessee , hence, we reject request for adjournment. 4. The ld DR supported the orders of the lower authorities. 5. The first ground of appeal

is with respect to the addition u/s 43B of the Act of Rs. 670742/-. The assessee has outstanding balance of Rs. 670742/- in account under the under the head “Reserve and surplus of the employees”. The claim of the assessee is that it is outstanding brought forward liabilities from the previous year 2009-10 and is not a liability prescribed u/s 43B of the Act.

6. The second ground of appeal is with respect to the applicability of provision of section 43B on the registration fees collected from the customers on sale of the vehicles. Claim of the assessee is that when the vehicles are sold the assessee collects the registration fees from the buyer for registering the vehicles on Page | 2

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