9911796707
|
Home
Issues:
Application of section 43B to outstanding liability for custom duty in agency business. Analysis: The appeal by the Revenue challenged the CIT (Appeals) order that section 43B did not apply to the assessee as they were only an agent, resulting in the deletion of an addition made by the Assessing Officer. The Assessing Officer contended that as long as custom duty remained an outstanding liability, section 43B was applicable, rejecting the plea of agency business by the assessee. The CIT (A) considered the modus operandi of the agency business, highlighting that the custom duty was payable only upon goods being cleared for consumption, and deleted the addition made by the Assessing Officer. The Tribunal analyzed the nature of the transactions, emphasizing that the assessee acted purely as an agent for the principal licensee, with no vested interest in the imported goods. The Tribunal noted that the custom duty was payable only upon clearance of goods, and the liability shown in the balance sheet did not represent a liability incurred but not discharged, thus not attracting the provisions of section 43B. Referring to a previous case, the Tribunal highlighted that where an assessee acts as an agent for the collection and payment of duties, the liability does not fall on the assessee. The Tribunal further considered alternative arguments presented by the assessee, including the timing of payment and relevant case laws supporting the non-applicability of section 43B. Ultimately, the Tribunal upheld the CIT (A) order, concluding that the assessee was merely an agent in the transactions related to the principal, and the provisions of section 43B did not apply. The Tribunal emphasized the reality of the situation and the nature of the transactions, affirming the justification of the CIT (A) order in the given circumstances. In conclusion, the Tribunal dismissed the appeal, ruling in favor of the assessee and upholding the decision of the CIT (A) that section 43B was not applicable to the outstanding liability for custom duty in the agency business scenario.
|
