2015 (6) TMI 648 - AT - Income Tax

High Court condones appeal delay, directs Tribunal to hear on merits. Sec. 43B prevails over 44AF.

Good Luck Kinetic Versus ITO, Ward-2, Margao

Good Luck Kinetic Versus ITO, Ward-2, Margao - TMI Issues:1. Delay in filing appeal condonation.2. Addition under Sec. 43B for statutory liabilities.3. Addition for sundry creditors under Sec. 44AF.4. Consideration of loss as per books of accounts.Delay in filing appeal condonation:The appeal was filed by the Assessee against the CIT(A) order for A.Y 2006-07, delayed by 253 days. The Tribunal initially dismissed the appeal due to the uncondoned delay. However, the High Court of Bombay at Goa later condoned the delay and directed the Tribunal to hear the appeal on merits. The appeal was presented before the Tribunal, with representation from both parties.Addition under Sec. 43B for statutory liabilities:The Assessee, a two-wheeler dealer, filed returns under Sec. 44AF with a 5% rate. The AO made additions under Sec. 43B for unpaid statutory liabilities and sundry creditors. The Assessee argued that Sec. 44AF excludes Sec. 28 to 43C provisions, hence no further additions should be made. The Tribunal analyzed the non-obstante clauses in Sec. 44AF and Sec. 43B, concluding that Sec. 43B's wider scope prevails over Sec. 44AF, allowing disallowance for unpaid statutory liabilities.Addition for sundry creditors under Sec. 44AF:Regarding the addition for sundry creditors, the Tribunal ruled that under Sec. 44AF, once the presumptive tax provision is applied, books of accounts are not considered for profit computation. Therefore, the addition for sundry creditors was deemed impermissible and was deleted.Consideration of loss as per books of accounts:The Assessee's alternative argument to consider the loss per books of accounts was dismissed since the Tribunal upheld the assessment under Sec. 44AF. As a result, the appeal was partly allowed, with the addition for sundry creditors being deleted. The judgment was pronounced on 15/06/2015.