Sh Vijay Kumar Aggarwal, Ferozepur V. The Income Tax Officer, 3(2), Ferozepur

ITA 136/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0621 (ITAT-AMRITSAR)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-06-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 29-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N MISHRA
• Assessee Lawyers: Y K SUD
• Keywords: Depreciation
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR (CAMP AT JA LANDHAR ) BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A NO. 136(ASR)/2016 ASSESSMENT YEAR: 2007-08 SH. VIJAY KUMAR AGGARWAL S/O, SH. VED PARKASH M/S., ANKUR CARRIES BAZAR NO.5, FIROZPUR PAN: AEDPA-9043C VS. INCOME TAX OFFICER, 3(2) FIROZPUR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. Y.K.SUD (CA) RESPONDENT BY: SH. A.N.MISHRA (DR) DATE OF HEARING: 22.06. 2016 DATE OF PRONOUNCEMENT : 29.06.2016 ORDER PER T.S.KAPOOR (AM): THIS IS AN APPEAL FILED BY ASSESSEE AGAINST THE ORD ER OF LEARNED CIT(A), BATHINDA DATED 05.01.2016, FOR ASST. YEAR:2 007-08. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. (I). THAT THE CIT(A) WAS NOT JUSTIFIED IN UPHOLDIN G THE ORDER OF AO AND DISMISSING THE APPEAL OF THE ASSESSEE WHICH WAS REM ANDED TO HIM BY THE ITAT WITH A SPECIFIC DIRECTION. (II). THAT CIT(A) AGAIN FAILED TO DISPOSE OFF THE R ECTIFICATION APPLICATION WHICH WAS DIRECTED BY THE ITAT TO BE DISPOSED OFF A ND THEREBY HE HAS SHOWN TOTAL JUDICIAL INDISCIPLINE BY NOT DECIDING T HE APPEAL OF THE ASESSEE AS PER THE DIRECTION OF THE ITAT. ITA NO.13 6 (ASR)/2016 ASST. YEARS: 2007-08 2 (III) THAT CIT(A) WAS NOT JUSTIFIED IN CONFIRMING T HE ADDITION OF RS.3,47,670/- MADE ON ACCOUNT OF INCOME FROM TRUCKS , WHEREAS THE INCOME WAS TO BE ASSESSED U/S 44AE OF THE INCOME TAX ACT. (IV) THAT THE CIT(A) WAS NOT JUSTIFIED IN IGNORING THE REPLY, SUBMISSIONS AND THE AFFIDAVIT FILED BY THE ASSESSEE IN RESPECT OF N UMBER OF TRUCKS OWNED BY THE ASSESSEE. (V) THE ORDER OF THE CIT(A) IS AGAINST THE LAW AND FACTS OF THE CASE. 3. THE BRIEF FACTS OF THE CASE AS NOTED IN THE IMPU GNED ORDER ARE THAT THE HONBLE TRIBUNAL HAD RESTORED THE MATTER TO LEA RNED CIT(A) VIDE ITS ORDER DATED 07.09.2015 WITH THE FOLLOWING DIRECTION S. 9 NOW, IT IS THE SPECIFIC REQUIREMENT OF SECTION 4 4AE THAT FOR THE SAID SECTION TO BECOME APPLICABLE, THE OWNERSHIP OF THE ASSESSEE MUST NOT EXCEED 10 GOODS CARRIERS AT ANY TIME DURING THE PRE VIOUS YEAR. THEREFORE, TO ASCERTAIN THE APPLICABILITY OR OTHERWISE OF THE PROVISIONS OF SECTION 44AE OF THE ACT, IT NEEDS TO BE FIRST DECIDED AS TO WHET HER THE ASSESSEE DID OR DID NOT OWN MORE THAN 10 TRUCKS DURING THE YEAR. 10. IN THIS VIEW OF THE MATTER, THIS ISSUE IS REMIT TED TO THE LEARNED CIT(A) TO BE DECIDED AFRESH IN ACCORDANCE WITH LAW, ON FIRST DECIDING THE ASSESSEES AFORESAID RECTIFICATION APPLICATION. THE ISSUE AS T O WHETHER THE ADDITION MADE BY THE AO IS TO BE SUSTAINED OR TO BE DELETED WOULD DEPEND ON THE FINDING TO BE ARRIVED AT BY THE LEARNED CIT(A) WITH REGARD TO THE RECTIFICATION APPLICATION. IT IS ORDERED ACCORDINGL Y. THE ASSESSEE SHALL BE OFFERED ADEQUATE OPPORTUNITY OF HEARING TO SUPPORT HIS CASE AND THE ASSESSEE SHALL COOPERATE IN THE REMAND PROCEEDINGS. 4. IN VIEW OF THE ABOVE DIRECTIONS THE ASSESSEE AGA IN APPEARED BEFORE LEARNED CIT(A) AND THE LEARNED CIT(A) HAS DECIDED T HE ISSUE BY HOLDING AS UNDER : NOW THE APPEAL AGAINST THE QUANTUM ASSESSMENT STAN DS REDECIDED BY THE HONBLE APPELLATE TRIBUNAL, AMRITSAR IN WHICH T HE DIRECTIONS FOR DETERMINING THE OWNERSHIP OF THE NUMBER OF TRUCKS ( IBID) HAVE BEEN GIVEN. THE APPELLANT WAS GIVEN AN OPPORTUNITY TO EXPLAIN, PURSUANT TO WHICH, IT WAS STATED VIDE AN AFFIDAVIT THAT, DURING THE YEAR UNDER CONSIDERATION, THE APPELLANT HAD ONLY SEVEN TRUCKS. THE SUBMISSIONS OF THE APPELLANT IS FOUND ITA NO.13 6 (ASR)/2016 ASST. YEARS: 2007-08 3 ACCEPTABLE TO THE EFFECT THAT ONLY SEVEN TRUCKS OWN ED BY THE APPELLANT WERE UTILIZED FOR THE TRANSPORTATION BUSINESS DURIN G THE YEAR CONSIDERATION. HOWEVER, SUCH A FINDING DOES NOT AFFECT THE ASSESSM ENT OF INCOME. IN THE ASSESSMENT ORDER, IT WAS CATEGORICALLY HELD BY THE AO THAT THE APPELLANT WAS NOT ENTITLED FOR THE PROVISIONS OF SECTION 44AE OF THE ACT AS THE APPELLANTS INCOME WAS PURSUANT TO THE BUSINESS CON TRACT AND NOT FROM PLYING HIRING OR LEASING OF GOODS CARRIERS. THIS PR OPOSITION WAS CONFIRMED IN APPEAL BY THE THEN LEARNED CIT(A). THE ISSUE WAS ALSO CONSIDERED BY THE PRESENT APPELLANT AUTHORITY IN THE APPELLATE PROCEE DINGS QUA THE PENALTY ORDER, WHEREIN IT WAS NOTICED AND RECORDED THAT THE APPELLANT WAS IN RECEIPT OF INCOME FROM BUSINESS CONTRACT IN WHICH T HERE WAS NO STIPULATION OF EXECUTION OF THE CONTRACT BY WAY OF ONLY THE TRU CKS OWNED BY THE APPELLANT. WHILE DECIDING THE PRESENT MATTER ALSO, THE APPELLANT WAS GIVEN AN OPPORTUNITY TO PRODUCE ANY DOCUMENT TO SUGGEST T HAT IN EXECUTION OF THE CONTRACT WITH M/S HERO HONDA LTD, ONLY THE SEVEN TR UCKS OWNED BY THE APPELLANT WERE USED. IN RESPONSE THERETO, IT WAS ME RELY SUGGESTED THAT THE COMPANY EXPRESSED ITS INABILITY TO PROVIDE THE REQU ISITE INFORMATION AS IT RELATES TO A PERIOD WHICH IS MORE THAN SIX YEARS OL D. IN THIS VIEW OF THE MATTER AND WHAT HAS BEEN STATED ABOVE, IT IS HELD THAT THOUGH THE APPELLANT WAS THE OWNER OF SEVEN TRUCKS AS STATED DURING THE YEAR UNDER CONSIDERATION, YET THERE IS NO SCOPE OF THE APPLICABILITY OF THE PROVISIONS OF SECTION 44AE AND ASSESSMENT OF INCOME AS PER THE PROVISIONS CONTAINED THEREIN. ON ACCOUNT OF THE FACT THAT THE APPELLANT HAD EXECUTED A BUSINESS CONTRACT AND WAS NOT IN THE BUSINESS OF PL YING, HIRING OF GOODS CARRIAGES. THERE IS NO EVIDENCE TO THE FACT THAT TH E ENTIRE BUSINESS OF SUPPLY OF MOTORCYCLES PURSUANT TO THE CONTRACT WITH M/S HERO HONDA LTD. WAS EFFECTED THROUGH THE APPELLANTS OWNED GOODS CA RRIAGES. FROM THE ABOVE FINDINGS OF THE LEARNED CIT(A), WE F IND THAT THOUGH HE ADMITS THAT ASSESSEE HAD OWNED ONLY SEVEN TRUCKS BU T HE DID NOT ACCEPT THAT THE PROVISIONS OF SECTION 44AE WERE APPLICABLE TO THE ASSESSEE COMPANY. THEREFORE, TO ARRIVE AT THE CORRECT DECISI ON, WE HAVE TO VISIT THE PROVISIONS OF SECTION 44AE OF THE ACT WHICH ARE REP RODUCED BELOW. 44AE. (1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAI NED IN SECTION 28 TO 43C, IN THE CASE OF AN ASSESSEE, WHO OWNS NOT MORE THAN TEN GOODS CARRIAGE [AT ANY TIME DURING THE PREVIOUS YEAR] AND WHO IS ENGAGED IN THE BUSINESS OF PLYING, HIRING OR LEASING SUCH GOODS CA RRIAGES, THE INCOME OF SUCH BUSINESS CHARGEABLE TO TAX UNDER THE HEAD PRO FITS AND GAINS OF BUSINESS OR PROFESSION SHALL BE DEEMED TO BE THE A GGREGATE OF THE PROFITS ITA NO.13 6 (ASR)/2016 ASST. YEARS: 2007-08 4 AND GAINS, FROM ALL THE GOODS CARRIAGES OWNED BY HI M IN THE PREVIOUS YEAR, COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SUB-SECTION (2). [(2) FOR THE PURPOSE OF SUB-SECTION (1), THE PROFIT S AND GAINS FROM EACH GOODS CARRIAGE SHALL BE AN AMOUNT EQUAL TO SEVEN THOUSAND FIVE HUNDRED RUPEES FOR EVERY MONTH OR PART OF A MONTH DURING WHICH THE GOO DS CARRIAGE IS OWNED BY THE ASSESSEE IN THE PREVIOUS YEAR OR AN AMOUNT CLAIMED TO HAVE BEEN ACTUALLY EARNED FROM THE VEHICLE, WHICHEVER IS HIGHER.] (3) ANY DEDUCTION ALLOWABLE UNDER THE PROVISIONS OF SECTIONS 30 TO 38 SHALL, FOR THE PURPOSES OF SUB-SECTION (1), BE DEEM ED TO HAVE BEEN ALREADY GIVEN FULL EFFECT TO AND NO FURTHER DEDUCTION UNDER THOSE SECTIONS SHALL BE ALLOWED. 5. THE ASSESSING OFFICER HAD HELD THAT AS PER THE T ERMS AND CONDITIONS OF CONTRACT WITH M/S HERO HONDA LTD. THE ASSESSEE HAD RECEIVED AN AMOUNT OF RS.81,51,591/- FROM THE COMPA NY AND OUT OF RECEIPTS, THE ASSESSING OFFICER HAD FURTHER OBSERVE D THAT ASSESSEE HAD WITHDRAWN CERTAIN AMOUNTS FOR MAKING PAYMENT OF INS TALLMENTS OF LOANS IN RESPECT OF CARS AND TRUCKS AND HAD ALSO INCURRED EXPENSES OUT OF THIS ACCOUNT AND AFTER CONSIDERING DEPRECIATION CLAIM TH E ASSESSING OFFICER ARRIVED AT AN AMOUNT OF RS.3,47,670/- TO BE ADDED TO THE RETURN OF INCOME OF THE ASSESSEE. THE LEARNED CIT(A) HAD ALSO UPHELD THE SAME AND IN THE SECOND ROUND OF PROCEEDINGS ALSO HE HAD HELD THAT ASSESSEE WAS NOT ENGAGED IN THE BUSINESS OF PLYING AND HIRING OF TRUCKS, HOWEVER, HE HAS ACCEPTED THE FACT THAT ASSESSEE OWNED SEVEN TRU CKS WHICH WERE LESS THAN 10 TRUCKS. IN VIEW OF THE FACTS, THE PROVISION S OF 44AE ARE CLEARLY APPLICABLE AS THE SECTION ITSELF STARTS WITH THE WO RD NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTION 28 TO 43C. THE TRIBUNALS DIRECTIONS IN THIS RESPECT WERE VERY CLEAR AS IT HA D REMANDED BACK TO THE ITA NO.13 6 (ASR)/2016 ASST. YEARS: 2007-08 5 LEARNED CIT(A) TO ASCERTAIN THE FACT AS TO WHETHER ASSESSEE OWNED MORE THAN 10 TRUCKS OR NOT . SINCE THIS FACT HAS BEEN AC CEPTED BY LEARNED CIT(A), THEREFORE, THE PROVISIONS OF SECTION 44AE W ERE CLEARLY APPLICABLE. THE LEARNED CIT(A) IS WRONG IN NOT FOLLOWING THE JU DICIAL DISCIPLINE AS THE ONLY DIRECTION OF ITAT WAS TO DECIDE THE APPEAL AFT ER ASCERTAINING THE NUMBER OF TRUCKS WHEREAS HE AFTER ACCEPTING THE FAC T THAT ASSESSEE OWNED SEVEN TRUCKS AGAIN DID NOT APPLY THE PROVISIO NS OF SECTION 44AE WHICH IS NOT AS PER LAW. 6. IN VIEW OF THE ABOVE FACTS, WE ARE IN AGREEMENT WITH THE ARGUMENTS OF LEARNED AR THAT PROVISIONS OF SECTION 44AE WERE CLEARLY APPLICABLE. 7. IN VIEW OF THE ABOVE, THE APPEAL FILED BY ASSESS EE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JUNE, 2016. SD/- SD/- (A.D. JAIN) (T. S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 29.06.2016. /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE ASSESSEE: (2) THE (3) THE CIT(A), (4) THE CIT, (5) THE SR DR, I.T.A.T., TRUE COPY BY ORDER