KOYYA GANGA VENKATA SATYA BHASKAR RAO, EAST GODAVARI DIST V. INCOME TAX OFICER, WARD-1, TUNI

ITA 145/VIZ/2023

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The case involves Koyya Ganga Venkata Satya Bhaskar Rao, who appealed against the orders of the Commissioner of Income Tax (Appeals) and the National Faceless Appeal Centre, which arose from the assessment orders under sections 143(1) and 143(1) r.w.s. 154 of the Income Tax Act, 1961 for the Assessment Year 2017-18. The primary contention was regarding the incorrect classification of transport charges received from A.P. Civil Supplies as agricultural income, which was initially admitted by mistake in the tax return. The assessee argued that these should be considered under 'income from other sources' and not added to the business income. The Tribunal found that the assessee had no agricultural income and that the income from transport business was correctly reported under section 44AE, thus allowing the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 135956 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-06-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 07-05-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Rectification of order; TDS
• Section: 194C; 143(1)

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम “एसएमसी”पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM “SMC” BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER आयकर अपील सं./I.T.A.No.145/Viz/2023 & 146/Viz/2023 (ननधधारण वर्ा / Assessment Year : 2017-18) Koyya Ganga Venkata Satya Bhaskar Rao A.V.Nagaram East Godavari Dist. [PAN : BESPK1580A] Vs. Income Tax Officer Ward-1 Tuni (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri G.V.N.Hari, AR प्रत्यधथी की ओर से / Respondent by : Shri O.N.Hari Prasada Rao, DR सुनवधई की तधरीख / Date of Hearing : 22.06.2023 घोर्णध की तधरीख/Date of Pronouncement : 31.07.2023 आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : These appeals are filed by the assessee against the orders of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre (NFAC), Delhi vide Order dated 09.03.2023, arising out of assessment orders passed u/s 143(1) and 143(1) r.w.s. 154 of the Income Tax Act, 1961 (in short ‘Act’) dated 05.09.2018 and 05.01.2022 respectively for the Assessment Year (A.Y.) 2017-18. During the course of appeal hearing, the Ld.AR has not pressed the appeal in 2 I.T.A. No.145 & 146/Viz/2023, A.Y.2017-18 Koyya Ganga Venkata Satya Bhaskar Rao, East Godavari Dist. I.T.A.No.146/Viz/2023, hence, the appeal is dismissed in-limine as withdrawn. Appeal in I.T.A.No.145/Viz/2023 is adjudicated as under. 2. Brief facts of the case are that the assessee, deriving income from running a rice mill, hatchery and from plying of lorry, filed his return of income on 31.03.2018, declaring total income of Rs.5,06,030/-, transportation charges of Rs.4,96,177/- received from A.P.Civil Supplies for transportation of paddy, which was addmitted as agricultural income by mistake. The return was processed by the CPC and the intimation u/s 143(1) of the Act was issued on 05.09.2018, wherein, the agricultural income was disallowed and addition was made under the head “income from other sources” and the total income was determined at Rs.10,02,210/-. The assessee noticed that there was a mistake crept in admitting the transportation charges as agricultural income, therefore, filed a petition for rectification of the intimation, explaining that the amount admitted under agricultural income was actually the transport charges received from AP Civil Supplies and the assessee had no agricultural income. The assessee further submiited that as the amount of Rs.4,96,177/- was gross transport receipts, making additon of the entire amount in the intimation is not correct. The assessee submitted revised computation of income, wherein, he admitted income of Rs.90,000/- from 3 I.T.A. No.145 & 146/Viz/2023, A.Y.2017-18 Koyya Ganga Venkata Satya Bhaskar Rao, East Godavari Dist. plying of lorry, computed in terms of section 44AE of the Act and requested the AO to rectify the intimation by accepting the income admitted and by deleting the addition of Rs.4,96,177/- made under the head “income from other sources”. The AO passed Rectification Order u/s 154 of the Act, without accepting the claim of the assessee. The AO stated that the assessee claimed the tax of Rs.9,914/- deducted at source by the AP Civil Supplies and hence, the CPC rightly made the additon of the corresponding income. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) and the Ld.CIT(A) dismissed the appeal of the assessee. 4. Aggrieved by the order of the Ld.CIT(A), the assessee preferred an appeal before the Tribunal by raising the following grounds of appeal : 1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in holding that the CPC is not in error in computing the income from transport business at Rs.4,96,177/- on the basis of the gross transport charges of Rs.4,96,177/- in Form No.26AS without appreciating the fact that the appellant had already admitted Rs.90,000/- in the return towards income from transport business u/s 44AE of the Act and the gross receipts of Rs.4,96,177 were wrongly reported as agricultural income in the return of income. 4 I.T.A. No.145 & 146/Viz/2023, A.Y.2017-18 Koyya Ganga Venkata Satya Bhaskar Rao, East Godavari Dist. 3. Any other grounds may be urged at the time of hearing. 5. Ground No.1 and 3 are general in nature which does not require specific adjudication. 6. With regard to Ground No.2, the only contention of the Ld.AR is that the assessee wrongly reported Rs.4,96,177/- as agricultural income in the return of income, but it is contract charges as per Form 26AS. Without appreciating the said fact, the AO(CPC) made disallowance, considering the transport charges of Rs.4,96,177/- as business income of the assessee. Apart from this, the assessee as per section 44AE has admitted income of Rs.90,000/- against the receipt of Rs.4,96,177/-. Moreover, the assessee had also deducted TDS u/s 194C of the Act. Therefore, pleaded that considering the same, the Hon’ble Tribunal may be pleased to set aside the erroneous order passed by the Ld.AO and allow the appeal of the assessee. 7. On the other hand, the Ld.DR argued that the assessee himself filed the return of income, showing the agricultural income of Rs.4,96,177/-. But the assessee has not filed any proof in support of his agricultural income. Hence, the AO rightly treated the amount of Rs.4,96,177/- as business income of the assessee and made the assessment. Therefore, pleaded to uphold the orders passed by the lower authorities. 5 I.T.A. No.145 & 146/Viz/2023, A.Y.2017-18 Koyya Ganga Venkata Satya Bhaskar Rao, East Godavari Dist. 8. I have heard both the parties and perused the material placed on record. After considering the arguments of both the counsels, I am of the view, that it is an undisputed fact that the assessee is not having any agricultural income, but, the assessee is having transport business and thereby earned income of Rs.4,96,177/- and also deducted TDS u/s 194C of the Act. The assessee is having only one lorry, therefore, the provision of section 44AE is applicable. Considering the TDS deduction, I have no desitation to come to the conclusion, that the assessee earned this income of Rs.4,96,177/- only from his transport business, therefore, section 44AE is applicable and the assessee has already admitted Rs.90,000/- as income from transport business, therefore, the AO is not justified to ignore the statutory provision of section 44AE and treat this income as business income of the assessee, just based on the mistake committed by the assessee, i.e. showing the receipt as agricultural income. Hence, I direct the AO to treat the income of the assessee as Rs.90,000/- u/s 44AE of the Act. 9. In the result, appeal of the assessee in I.T.A. No.145/Viz/2023 is allowed and I.T.A.No.146/Viz/2023 is dismissed in-limine as not pressed. 6 I.T.A. No.145 & 146/Viz/2023, A.Y.2017-18 Koyya Ganga Venkata Satya Bhaskar Rao, East Godavari Dist. Order pronounced in the open court on 31 st July, 2023. Sd/- (द ु व्वूरु आर.एल रेड्डी) (DUVVURU RL REDDY) न्याधयक सदस्य/JUDICIAL MEMBER Dated : 31.07.2023 L.Rama, SPS आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– Koyya Ganga Venkata Satya Bhaskar Rao, A.V.Nagaram, East Godavari Dist. 2. रधजस्व/The Revenue – The Income Tax Officer, Ward-1, Bank Colony, Kothapet, Tuni 3. The Principal Commissioner of Income Tax, Visakhapatnam 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam