Case Law Details
Thar Automobiles Pvt. Ltd. Vs ITO (ITAT Delhi)
The issue under consideration is regarding applicability of provision of section 43B on the registration fees collected from the customers on sale of the vehicles?
The assessee is a company engaged in the business of trading of Honda Two wheelers. When the vehicles are sold the assessee collects the registration fees from the buyer for registering the vehicles on behalf of buyer with Road Transport Authority. As soon as the RTO registration fees is paid on behalf of the buyer, the account is squared up . It is neither a tax , duty or other sum payable by the assessee. It merely facilitates the registration of vehicle in the buyers name.
Further, ITAT find that the above sums are not covered under any of the provisions of clause(a) to (g) of section 43B. Both are trading liabilities if those are not discharged by the assessee completely , they can be taxed as income of the assessee. In view of the above facts ITAT direct the ld AO to delete the addition and accordingly the appeal is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
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