ITO, New Delhi V. Sh. Bhavendra Jha, New Delhi

ITA 2696/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4773 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 01-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: SACHIN JAINCA
• Keywords: Business income; Depreciation
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH A: NEW DELHI) BEFORE SHRI S. V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI C. M. GARG, JUDICIAL MEMBER ITA NO.2696/DEL/ 2012 (ASSESSMENT YEAR:2008-09) ITO VS. BHAVENDRA JHA WARD-23(1), ROOM NO. 188, H-20, GREATER KAILASH-1, C. R. BUILDING, I. P. ESTATE, NEW DELHI. NEW DELHI. PAN: ADJPB9878K (APPELLANT) (RESPONDENT) ASSESSEE BY :SHRI SACHIN JAIN,CA. REVENUE BY :MS. Y. KAKKAR, DR. ORDER PER C. M. GARG, J M: THIS APPEAL HAS BEEN PREFERRED BY THE REVENUE AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XVII, NEW DELHI VIDE DATED 16.03.2012 IN APPEAL NO- 114/CIT (A)XVII/DEL/2011-1 2 FOR THE ASSESSMENT YEAR 2008-09.THE SOLE GROUND RAISED BY THE REVENUE REDS AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD.CIT (A) HAS ERRED IN RESTRICTING THE ADDITION AT RS.22,39,724/- INSTEAD OF RS.87,82,678/- ON ACCOUNT OF INCOME FROM BUSINESS OF TAXI HIRING. 2. THE BRIEF FACTS GIVING RISE TO THIS APPEAL ARE T HAT, THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RENTING CARS MAINLY FOR THE CALL CENTRE SITUATED AT ITA NO.2696/DEL/2012 2 NOIDA AND GURGAON AREA. THE ASSESSEE FILED A RETURN DECLARING TOTAL INCOME OF RS.14,69,900/-. DURING THE ASSESSMENT PROCEEDING S THE ASSESSEE COULD NOT PRODUCE ITS BOOKS OF ACCOUNTS BEFORE THE AUTHORITIE S BELOW THE ASSESSEE EXPLAINED THAT THE BOOKS OF ACCOUNTS WERE MISPLACED DUE TO MCD SEALING DRIVE THEREFORE, THE SAME COULD NOT BE PRODUCED. TH E ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) OF THE INCOME T AX ACT, 1963 (FOR SHORT THE ACT) ON AN ESTIMATED BASIS AND THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS.87,82,678/-. 3. APROPOS SOLE GROUND OF THE REVENUE, WE HAVE HEAR D THE RIVAL ARGUMENT OF BOTH THE PARTIES AND CAREFULLY PERUSED THE RECORD PLACED BEFORE US INTERALIA, ASSESSMENT ORDER AS WELL AS IMPUGNED ORDER. 4. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) DRAWN O UR ATTENTION TOWARDS ASSESSMENT ORDER AND SUBMITTED THAT THE ASS ESSING OFFICER RIGHTLY ESTIMATED THE INCOME OF THE ASSESSEE, U/S 44ADOF TH E ACT IN ABSENCE OF BOOKS OF ACCOUNTS, BUT THE CIT (A) RESTRICTED THE A DDITION ON VERY LOWER SIDE WITHOUT ANY REASONABLE AND COGENT BASIS. THE DEPART MENTAL REPRESENTATIVE FURTHER SUBMITTED THAT THE ASSESSEE CLAIMED EXCESS EXPENSES ON ACCOUNT OF TAXI HEARING AND THE SAME WAS RIGHTLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE DEPARTMENTAL REPRESENTATIVE POINTED O UT THAT THE ASSESSEE SHOWN HUGE EXPENSES ON ACCOUNT OF ESTABLISHMENT, AD MINISTRATIVE AND ITA NO.2696/DEL/2012 3 SEALING EXPENSES AND THE ASSESSING OFFICER RIGHTLY DISALLOWED 15% PART OF THIS CLAIM OF THE ASSESSEE BEING EXCESSIVELY CLAIME D AND TREATED AS NOT INCURRED. THE DEPARTMENTAL REPRESENTATIVE VEHEMENTL Y CONTENDED THAT THE CIT (A) RESTRICTED THE ADDITION ON VERY LOWER SIDE WITHOUT ANY REASONABLE AND COGENT BASIS, THEREFORE THE IMPUGNED ORDER MAY BE SET ASIDE BY RESTORING THAT OF THE ASSESSING OFFICER. 5. THE AR REPLIED THAT THE ASSESSING OFFICER IGNORE D FACTUAL MATRIX OF THE CASE AND MADE ADDITION AND DISALLOWANCES ON SUR MISES AND CONJECTURES WHICH WAS RIGHTLY RESTRICTED BY THE CIT (A). THE AR FURTHER CONTENDED THAT THE CIT (A) CORRECTED THE ASSESSMENT ORDER BY CONSI DERING POSITION OF EARLIER ASSESSMENTS OF THE ASSESSEE AND CIT (A) RIGHTLY MOD IFIED THE ASSESSMENT ORDER IN A PROPER AND JUSTIFIED WAY. THE AR SUPPORT ED THE IMPUGNED ORDER AND SUBMITTED THAT THERE IS A TYPOGRAPHICAL ERROR I N THE GROUND OF APPEAL AND THE ASSESSING OFFICER SHALL BE DIRECTED TO CORRECT THE TAXABLE INCOME OF THE ASSESSEE AS PER LETTERS AND SPIRIT OF THE FIRST APP ELLATE ORDER. 6. ON CAREFUL CONSIDERATION OF THE ABOVE RIVAL SUBM ISSIONS AND CONTENTIONS. AT THE OUTSET, WE OBSERVE THAT UNDISPU TEDLY THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNTS OF THE ASSESSEE AND IT WA S STATED THAT THE BOOKS OF ACCOUNTS HAVE BEEN MISPLACED. THE ASSESSEE ALSO COU LD NOT PRODUCE ALL THE BILLS AND OTHER RELEVANT VOUCHERS AND DOCUMENTS AND ONLY SOME BILLS WERE ITA NO.2696/DEL/2012 4 PLACED BEFORE THE ASSESSING OFFICER. DURING THE FIR ST APPELLATE PROCEEDINGS THE CIT (A) CLARIFIED THAT THE AMOUNT OF EXCESS EXP ENSES ON TAXI HIRING WAS ESTIMATED BY THE ASSESSING OFFICER AT RS.58,25,038/ - AND 15% OF THE VARIOUS ESTABLISHMENT AND ADMINISTRATIVE EXPENSES AMOUNTING TO RS.14,93,746/- WAS ALSO DISALLOWED IN ABSENCE OF BOOKS OF ACCOUNTS AND ITS CLARIFICATION. ACCORDINGLY, THE ASSESSING OFFICER ARRIVED AT THE T OTAL INCOME OF RS.87,82,678/-. 7. THE CIT (A) DEALT THE ISSUE OF REJECTION OF BOOK S OF ACCOUNTS AND INCOME ESTIMATION BY THE ASSESSING OFFICER AND HOLD THAT THE ASSESSEE HAD NOT GONE ON APPEAL AGAINST THE CIT (A)S ORDER FOR THE ASSESSMENT YEAR 2006- 07 WHEREIN THE INCOME WAS ESTIMATED WITHOUT CONSIDE RING THE PROFIT AND LOSS ACCOUNT AND THE BALANCE SHEET THEREFORE, IN THE ABS ENCE OF BOOKS OF ACCOUNTS THE ASSESSING OFFICER RIGHTLY PROCEED TO ESTIMATE T HE INCOME OF THE ASSESSEE. WE ARE ALSO OF THE OPINION THAT IN ABSENCE OF BOOKS OF ACCOUNTS, THE ASSESSING OFFICER HAD NO OPTION BUT TO ESTIMATE THE INCOME ON THE BASIS OF INFORMATION AND DETAILS AVAILABLE BEFORE HIM AND IN THE LIGHT OF EARLIER ASSESSMENT ORDERS. THE CIT (A) GRANTED RELIEF TO TH E ASSESSEE WITH FOLLOWING OBSERVATIONS AND FINDINGS: 4. GROUND NO.2 TO 7 ARE REGARDING THE DETERMINATIO N OF THE APPELLANTS TOTAL INCOME OF RS.87,82,678/- AFTER DI SALLOWING CERTAIN EXPENSES ON THE GROUND THAT THESE EXPENSES ARE EXCESSIVE. FROM THE ASSESSMENT ORDER, IT IS CLEAR T HAT THE ITA NO.2696/DEL/2012 5 COMMISSIONER OF INCOME TAX (APPEALS)-XXIV IN HIS AP PEAL ORDER FOR ASSESSMENT YEAR 2006-07 DATED 15.03.2010 HAD MADE AN ESTIMATED ADDITION AS BOOKS OF ACCOUNTS AND BILL S AND VOUCHERS WERE CLAIMED TO BE MISPLACED IN THAT YEAR TOO. THE CIT (A) FOR ASSESSMENT YEAR 2006-07 HAD MADE AN EST IMATED ADDITION AS THE BOOKS OF ACCOUNTS AND BILLS WERE NO T PRODUCED BEFORE THE ASSESSING OFFICER OR DURING THE APPELLAT E PROCEEDINGS. SINCE THE APPELLANT IS UNABLE TO PRODU CE BOOKS OF ACCOUNTS OR BILLS AND VOUCHERS EVEN DURING THIS AP PELLATE PROCEEDINGS ON THE GROUND THAT THE SAME ARE MISPLAC ED DUE TO MCDS SEALING DRIVE, I AM ALSO CONSTRAINED TO REJEC T THE P&L ACCOUNT AND BALANCE SHEET SUBMITTED BY THE APPELLAN T AND MAKE AN ESTIMATION BASED ON THE CIT (A)S ORDER DATED 15 .03.2010 FOR THE A. Y. 2006-07. THIS IS ESSENTIAL BECAUSE TH E ASSESSING OFFICERS DISALLOWANCE OF EXCESS EXPENDITURE IS NOT BASED ON ANY COMPARABLE CASE OR ANY EVIDENCE TO SUBSTANTIATE THAT THE EXPENSES CLAIMED ARE EXCESSIVE. IT IS ALSO PERTINEN T TO NOTE THAT THE APPELLANT HAD NOT GONE ON APPEAL AGAINST THE CO MMISSIONER OF INCOME TAX (APPEALS)S ORDER FOR THE ASSESSMENT YEAR.2006- 07 WHERE INCOME WAS ESTIMATED WITHOUT CONSIDERING T HE P& L ACCOUNT OR THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME. THE RELEVANT PORTION OF THE CIT (A)S ORDER FOR THE A. Y. 2006-07 IS AS FOLLOWS: 5.1. THE APPELLANT HAS PAID RS.2,77,64,779/- TO TH E OWNERS OF HIRED/LEASED VEHICLES OUT OF CORRESPONDING RECEIPTS OF RS.2,95,37,000/- THE TDS HAS BEEN DEDUCTED THEREON TREATING THEM AS SUBCONTRACTOR. THIS SUM IS OUTGOING AT SOUR CE. THUS, NORMALLY, THERE IS NO PROFIT ELEMENT EMBEDDED IN TH E OUTGOINGS OF RS.2,77,64,779/-, UNLESS PROVED OTHERWISE. THE I NCOME FROM THIS PART OF THE BUSINESS, AS PER THE ARS WORKING FILED BEFORE ME IS RS.5,76,866/-. KEEPING IN VIEW OF THE ABOVE THE FACTS IN TOTALITY, PROFIT RATIO AND SUBMISSION OF THE AR, I AM OF THE CONSIDERED VIEW THAT DISALLOWANCE OF RS.2,00,000/- OUT OF EXPENDITURE ON THIS SCORE WILL MEET THE END OF JUST ICE AS NOTHING MUCH IS LEFT O EARN THIS INCOME. HENCE, THE ASSESSA BLE INCOME FROM HIRED/LEASED VEHICLES WORKS OUT TO RS.7,76,866 /-. 5.2 THE RECEIPTS FROM PLYING OF OWNED VEHICLES OF T HE APPELLANT IS RS.2,21,65,024/-. AFTER FOLLOWING CORR ESPONDING ITA NO.2696/DEL/2012 6 GENUINE AND VERIFIABLE EXPENSES INCURRED WHOLLY AND EXCLUSIVELY FOR BUSINESS, THE INCOME CAN BE DEDUCED THERE FROM. THE INCOME FROM THIS PART OF BUSINESS, AS PER THE A RS WORKING FILED BEFORE ME IS RS.1,40,679/-. HOWEVER, NO DETAI LS WERE PRODUCED FOR VERIFICATION/INVESTIGATION. THE BOOKS OF ACCOUNTS, BILLS, VOUCHERS HAVE BEEN CLAIMED TO HAVE BEEN MISP LACES; HENCE THESE WERE NOT PRODUCED EITHER BEFORE THE ASS ESSING OFFICER OR ME. THE INCOME THEREFORE HAS TO WORK OUT BY APPLYING LOGIC OR REASONING THAT HE MUST HAD INCURR ED ALL THE CONTINGENT EXPENSES IN THE REGULAR COURSE OF BUSINE SS. IT IS ALSO A FACT THAT THE ASSESSING OFFICER DID NOT CARE TO Q UOTE/ MENTION ANY COMPARATIVE CASE TO ESTABLISH THAT THE ASSESSEE HAD SUPPRESSED HIS BUSINESS PROFITS; PARTICULARLY CONSI DERING THE FACT EMERGING FROM RECORDS NOT ONLY OF THE RELEVANT YEAR BUT OF EARLIER YEAR ALSO. THE NET PROFIT RATIO OF THE RELE VANT YEAR FOR RENT-A-CAB BUSINESS IS BETTER THAN THE EARLIER YEAR S. AT MOST THE ASSESSING OFFICER WOULD HAVE APPLIED THE NET PROFIT RATE OF 8% ON OWNED VEHICLES BY THE APPELLANT IN ADDITION TO I NCOME WORKED OUT IN PARA5.1 ABOVE. THERE IS INTEREST OUT GOINGS OF RS.4,84,087/- AND DEPRECIATION OF RS.25,87,313/-, W HICH AFFECT THE NET PROFIT RATE SUBSTANTIALLY. IN CASE THE APPE LLANT WOULD HAVE NOT TAKEN LOAN FOR HIS VEHICLES THE NET INCOME WOULD HAVE BEEN ON HIGHER SIDE. THE APPELLANT HAS FILED AFFIDA VIT STATING THAT THE VEHICLES ARE DIESEL DRIVEN. IN THIS REGARD , SOME OF THE RCS WERE ALSO PRODUCED FOR VERIFICATION. AFTER ANAL YZING ALL FACTS, I AM OF THE CONSIDERED VIEW THAT THE FUEL CO ST CANNOT BE LESS THAN THE 40% OF RECEIPTS THOUGH THE APPELLANT HAS SHOWN @50% HR COST WOULD BE 13% OF RECEIPTS AS CLAIMED, R EPAIR AND MAINTENANCE COST WOULD BE 10% OF RECEIPTS AS CL AIMED THE ROAD TAX AND INSURANCE COST WOULD BE 7% OF RECEIPTS AS CLAIMED AND OTHER EXPENSES INCLUDING BANK CHARGES CANNOT BE MORE THAN 15% . CONSIDERING THE FACTS IN TOTALITY, I AM OF THE VIEW THAT PROFIT @ 15% OF BUSINESS RECEIPTS OF RS.2,21,6 5,024/- AND DEPRECIATION OF RS.25,87,313/- WILL BE REASONABLE T O MEET THE END OF JUSTICE, WHICH WORKS OUT TO RS.33,24,476/-. AFTER ALLOWING SET OFF OF INTEREST OUT GOINGS OF RS.4,84, 087/- AND DEPRECIATION OF RS.25,87,313/-, THE INCOME FROM REN T-A-CAB IN RESPECT OF OWNED VEHICLES BY THE APPELLANT COMES TO RS.2,53,354/-. ITA NO.2696/DEL/2012 7 4.2. THE CIT (A) IN THE ABOVE APPELLATE ORDER HAD E STIMATED THE APPELLANTS INCOME FOR A. Y. 2006-07 AT RS.10,3 0,220/- AND HE HAS CALCULATED THIS BY WORKING OUT BY SEPARATELY THE INCOME FROM HIRED/LEASED VEHICLES AND INCOME FROM OWN VEHI CLES BASED ON THE WORKING SUBMITTED BY THE AR DURING THE APPEL LATE PROCEEDINGS. THE INCOME FROM HIRED VEHICLES WAS EST IMATED AT RS.7,76,866/- AND THIS WAS CALCULATED ON THE BASIS OF SEPARATE WORKING SUBMITTED FOR HIRED/LEASED VEHICLES BY THE AR, WHICH SHOWED AN INCOME OF RS.5,76,866/- AND ON THIS AMOUN T THE CIT (A) MADE A FURTHER DISALLOWANCE OF RS.2,00,000/- AN D ARRIVED AT AN ESTIMATED INCOME OF RS.7,76,866/- ON HIRED/LEAS ED VEHICLES. AS REGARDS TO APPELLANTS OWN VEHICLES, THE AR HAD THEN PRODUCED A SEPARATE WORKING BEFORE THE CIT (A) DURI NG THE APPELLATE PROCEEDINGS WHICH SHOWED AN INCOME OF RS.1,40,679/- ON A TOTAL RECEIPT OF RS.2,21,65,024/ - FOR OWN VEHICLES. THE CIT (A) THEN ESTIMATED THE PROFIT OF OWN VEHICLES AT 15% OF THE RECEIPTS OF RS.2,21,65,024/- AND FURT HER GRANTED DEPRECIATION AND INTEREST CLAIMS TO ARRIVE AT AN ES TIMATED PROFIT OF RS.2,53,354/- AS THE APPELLANTS INCOME FROM OWN VEHICLES. THUS, THE TOTAL ESTIMATED ADDITION MADE BY THE CIT (A) FOR ASSESSMENT YEAR.2006-07 IN HIS ORDER DATED 15.03.20 10 WAS RS.10,30,220/-(7,76866+2,53,354). 4.3 HOWEVER, THE APPELLANTS AR IS UNABLE TO PRODUC E SUCH BREAK UP OF INCOME FROM HIRED VEHICLES AND OWN VEHI CLES DURING THIS APPELLATE PROCEEDINGS, SINCE THE NECESS ARY BOOKS OF ACCOUNTS OF INFORMATION IS NOT AVAILABLE WITH THE A PPELLANT. THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER DID NOT M ENTION ANY REASON FOR CONCLUDING THAT THE APPELLANT HAD DEBITE D EXCESS EXPENDITURE IN THE P & L ACCOUNT SUBMITTED BY HIM N OR MENTIONED ANY COMPARABLE CASE TO JUSTIFY THE DISALL OWANCE OF EXCESS EXPENDITURE CLAIMED BY THE APPELLANT DURING THIS ASSESSMENT YEAR. THEREFORE, DURING THE HEARING ON 1 4.03.2012 THE APPELLANTS AR WAS INTIMATED THAT THIS APPEAL W ILL BE DECIDED ON AN ESTIMATED BASIS BASED ON THE CIT (A) S ORDER FOR A. Y. 2006-07. SINCE THE CIT (A) HAS CALCULATED INC OME FROM HIRED VEHICLES AT RS.7,76,866/- ON A PAYMENT OF RS.2,77,64,779/- TO VARIOUS OWNERS OF HIRED VEHICLE S, THE PROFIT OF THE APPELLANT FOR THAT YEAR WORKS OUT AT 2.8% OF THE TOTAL PAYMENT. THEREFORE, IT WAS PROPOSED THAT THE INCOME FROM HIRED ITA NO.2696/DEL/2012 8 VEHICLES FOR THIS YEAR WILL BE ESTIMATED AT 3% OF T HE TAXI HIRING CHARGES DEBITED IN P & L ACCOUNT OF RS.5,74,57,479/ -. THEREFORE, THE INCOME FROM HIRED VEHICLES IS ESTIMA TED AT RS.17,23,724/- THIS ASSESSMENT YEAR AND THE APPELLA NTS AR WAS INTIMATED ABOUT THIS ESTIMATION. THE PROFIT FROM OW N VEHICLES COULD NOT BE ESTIMATED USING THE METHOD FOLLOWED BY THE CIT (A) FOR THE A. Y.2006-07 AS THE APPELLANTS AR WAS NOT ABLE TO INTIMATE SEPARATELY THE RECEIPTS FROM OWN VEHICLES OR THE INCOME FROM OWN VEHICLES AS DONE IN A. Y. 2006-07 D URING APPELLATE PROCEEDINGS. THEREFORE, IT WAS PROPOSED T HAT SINCE THE APPELLANT HAS 43 OWN VEHICLES DURING THE YEAR A GAINST 40 OWN VEHICLES IN A. Y. 2006-07, APPELLANTS INCOME F ROM OWN VEHICLES IS ESTIMATED AT RS.1,000/- PER MONTH PER V EHICLE FOR THIS ASSESSMENT YEAR. THUS, THE INCOME IS ESTIMATED PER VEHICLES IS RS.12,000/- PER ANNUM AND FOR 43 VEHICLES THE ES TIMATED INCOME IS RS.5,16,000/-. THIS ESTIMATED AMOUNT AS T HE APPELLANTS INCOME FROM OWN VEHICLES WAS ALSO INTIM ATED TO THE APPELLANTS AR AND HE WAS ASKED TO SUBMIT HIS OBJEC TIONS, IF ANY, BY 15.03.2012. SINCE NO OBJECTION IS FILED, TH E TOTAL INCOME OF THE APPELLANT FROM RENT-A-CAB BUSINESS IS ESTIMA TED AT RS.22,39,724/- WHICH INCLUDES RS.17,23,724/- FROM H IRED VEHICLES AND RS.5,16,000/- FROM THE APPELLANTS OWN VEHICLES. THIS ESTIMATION IS MADE BECAUSE THE APPELLANT IS NO T ABLE TO PRODUCE BOOKS OF ACCOUNTS DURING THE ASSESSMENT PRO CEEDINGS OR APPELLATE PROCEEDINGS ON THE PLEA THAT BOOKS OF ACCOUNTS ARE MISPLACED DUE TO MCDS SEALING DRIVE. AS A RESULT O F THE ASSESSING OFFICER OF RS.22,39,724/- IS SUSTAINED. I T APPEARS FROM THE FIGURES GIVEN IN THE ASSESSMENT ORDER THAT THE APPELLANT HAD CLAIMED RS.9,379/- AS DEDUCTION UNDER CHAPTER VIA OF THE I. T. ACT. THE ASSESSING OFFICER IS REQU ESTED TO VERIFY THIS AND GRANT THE APPELLANT THE ENTITLED RELIEF AS CLAIMED IN THE RETURN OF INCOME AS PER LAW. AS A RESULT, THESE GRO UNDS OF APPEAL ARE CONSIDERED AS PARTLY ALLOWED. 8. IN THE LIGHT OF ABOVE FACTUAL MATRIX, WE CLEARLY OBSERVE THAT THE ASSESSING OFFICER ENHANCED THE RETURN OF INCOME BY MAKING TWO ADDITION, FIRST ON ACCOUNT OF EXCESS CLAIM OF TAXI HIRING EXP ENSES AND SECOND 15% ITA NO.2696/DEL/2012 9 DISALLOWANCE OF EXPENSES CLAIMED ON ESTABLISHMENT A ND ADMINISTRATIVE EXPENSES. THE ASSESSING OFFICER HELD THAT AS PER RA TES CHARGED BY TAXIES AND TOTAL KILOMETERS SHOWN BY THE ASSESSEE AND FOR WHIC H THE PAYMENTS WERE MADE BY THE ASSESSEE, THE ASSESSEE CLAIMED RS.58,25 ,038/- EXCESSIVELY THEREFORE, THE SAME WAS DISALLOWED. 9. THE CIT (A) CHANGED THE BASIS OF THE ESTIMATION OF INCOME AND PROPOSED THAT THE INCOME FROM HIRED VEHICLES WILL B E ESTIMATED AT 3% OF THE TAXI HIRING CHARGED DEBITED IN THE PROFIT AND LOSS ACCOUNT AND THE INCOME FROM HIRED VEHICLES WAS ESTIMATED AT RS.17,23,724/- . THE CIT (A) ALSO PROPOSED THAT INCOME FROM OWN VEHICLES OF THE ASSES SEE WAS ESTIMATED AT RS.5,16,000/- AND THE ESTIMATION OF THE INCOME OF T HE ASSESSEE FROM RENTING OF CAR BUSINESS AT RS.22,39,074/-(INCLUDING RS.17,2 3,724/- FROM HIRED VEHICLES AND RS.5,16,000/- FROM ASSESSEES OWN VEHI CLES) WITH OTHER ESTIMATION THE CIT (A) ESTIMATED THE TOTAL INCOME O F THE ASSESSEE AT RS.22,39,724/- BY REDUCING ASSESSED INCOME OF THE A SSESSEE TO THIS EXTENT. ACCORDINGLY, THE ASSESSEE GOT RELIEF OF RS.65,42,95 4/- AND THE TOTAL INCOME OF THE ASSESSEE WAS ESTIMATED AT RS.22,39,724/- IN STEAD OF 87,82,678/- FROM THE BUSINESS OF TAXI HIRING. THE COUNSEL OF THE ASS ESSEE POINTED OUT THAT THERE IS SOME MISTAKE IN THE FIGURES APPEARING IN THE IMP UGNED ORDER OF THE CIT (A) AND HE PROPOSED CORRECT FIGURES BUT WE ARE NOT GOING TO DECIDE THE ITA NO.2696/DEL/2012 10 CORRECTNESS OF THE FIGURES APPEARING IN BOTH THE OR DERS SIMULTANEOUSLY WE DIRECT THE ASSESSING OFFICER THAT THE TOTAL INCOME OF THE ASSESSEE SHOULD BE ACCEPTED AS PER LETTER AND SPIRIT OF THE IMPUGNED O RDER OF THE CIT (A). 10. ON THE BASIS OF FORGOING DISCUSSIONS WE ARE OF THE CONSIDERED VIEW THAT WHEN THE ASSESSEE COULD NOT PRODUCE ITS BOOKS OF ACCOUNT THEN THE REVENUES AUTHORITIES HAVE NO ADDITION BUT TO ESTIM ATE THE INCOME OF THE ASSESSEE ON THE BASIS OF DETAILS AND MATERIALS AVAI LABLE BEFORE THEM AND IN THE LIGHT OF EARLIER ASSESSMENT ORDERS. IN THE PRES ENT CASE THE ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF EXCESSIVE CLAIM OF PAYMENT OF HIRING CHARGES AND BY MAKING DISALLOWANCE OF 15% OF ESTABL ISHMENT, ADMINISTRATIVE AND SEALING EXPENSES BUT WE ARE UNAB LE TO SEE ANY JUSTIFIED REASON FOR MAKING THIS DISALLOWANCE AND ADDITION. 11. PER CONTRA THE COMMISSIONER OF INCOME TAX (APPE ALS) RIGHTLY FOLLOWED THE PERCENTAGE OF PROFIT ON THE BASIS OF P AYMENT MADE BY THE ASSESSEE TO VARIOUS TAXIES OWNERS AND TOGETHER 3% O F THE PAYMENT IN STEAD OF 2.8% WHICH WAS ACCEPTED BY THE REVENUE AUTHORITIES IN A. Y. 2006-07. CTHE CIT (A) ALSO ESTIMATED THE INCOME FROM ASSESSEES O WN VEHICLES AT RS.1000% PER MONTH, I.E. RS.12,000/- PER ANNUM, PER VEHICLE AND ESTIMATED INCOME AT RS.5,16,000/- THAT FROM ASSESSEES OWN 43 VEHICLES. ON SPECIFIC QUERY FORM THE BENCH THE DEPARTMENTAL REPRESENTATIV E COULD NOT SUBMIT ANY ITA NO.2696/DEL/2012 11 COGENT REASON TO CHALLENGE THE CORRECTNESS OF THE A BOVE FIGURES PROPOSED AND FORTIFIED BY THE CIT (A). WHEN THE CIT (A) HAS FOLL OWED THE BASIS AND PRINCIPLE OF ESTIMATION ACCEPTED BY THE REVENUE AUT HORITIES IN EARLIER A. Y 2006-07 THEN WE ARE OF THE CONSIDERED OPINION THAT WE ARE UNABLE TO SEE ANY PERVERSITY, AMBIGUITY OR ANY OTHER VALID REASON TO INTERFERE WITH THE OBSERVATIONS AND FINDINGS OF THE CIT (A) IN THE IMP UGNED ORDER THUS SOLE GROUND OF THE REVENUE BEING DEVOID OF MERITS IS DIS MISSED. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 13 TH /12/ 2013. SD/- SD/- (S. V. MEHROTRA) (C. M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 13 TH DAY OF DECEMBER, 2013 S.SINHA COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT(ITAT), NEW DELHI. AR,ITAT NEW DELHI.