Satyanarayana Deo, Koraput V. ITO, Jeypore

ITA 310/CTK/2011

• Counselvise Citation: 31022114 RSA 2011
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 09-08-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 06-06-2011
• Court: TRIBUNAL
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: N ANAND RAO
• Keywords: Depreciation

Judgement Text

IN THE INCME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, ACCOUNTANT MEMBER, AND SHRI K.S.S.PRASAD RAO, JUDICIAL MEMBER. ITA NO. 310/CTK/2011 (ASSESSMENT YEAR 2006 - 07) SRI SATYANARAYANA DEO, PROP. SUMITRA ENTERPRISES, GOUT AM NAGAR, KORAPUT, DIST. KORAPUT, PAN: ABRPD 7075 J VERSUS INCOME - TAX OFFICER, WARD 2, JEYPORE. (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI N.ANAND RAO, AR FOR THE RESPONDENT SHRI S.C.MOHANTY, DR DATE OF HEARING : 09.08.2011 DATE OF PRONOUNCEMENT : 12.08.2011 ORDER SHRI K.K.GUPTA, ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE AGITATES THE ORDER OF THE COMMISSIONER OF INCOME - TAX (APPEALS) DT.24.2.2011, RAISING THE FOLLOWING GROUNDS. 1 . THAT THE APPELLANT MAINTAINS REGULAR BOOKS OF ACCOUN T HENCE DISALLOWANCE OF EXPENSES OF 4,99,835 ON ACCOUNT OF DIESEL, REPAIRS OF DEPRECIATION OF TRUCK IS UNJUST. 2 . THAT THE APPELLANT IS DOING BUSINESS IN KEROSINE AND OPERATES THE TRUCK FOR HIS OWN BUSINESS BESIDES EARNS INCOME OF RENT FOR USE OF THE SAID VEHICLE. 3 . THAT THE APPELLANT HAS SHOWN EXTRA INCOME AN OPERATION OF TRUCK FOR WHICH THE LD. CIT(APPEALS) THOUGHT NO BOOKS OF ACCOUNT ARE MAINTAINED FOR TRUCK HENCE DISALLOWANCE IS MADE. 4 . THAT THE APPELLANT PAYS GODOWN RENT 1,500 PER MONTH HENCE DISALLOWANCE OF RENT IS UNJUST. 5 . THAT THE TELEPHONE EXPENSES ARE ONLY THE PURPOSE OF THE BUSINESS HENCE DISALLOWANCE IS UNWARRANTED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR AT 1,49,880 ALONG WITH AGRICULTURAL INCOMEOFRS.40,000 DULY SUPPORTED BY AUDITED REPORT U/S.44AB. ITA NO.310/CTK/2011 2 THE ASSESSEE ALSO DISCLOSED INCOME FROM TRUCK PLYING UNDER THE PROVISIONS OF SECTION 44AE WHICH WAS VERIFIED BY THE ASSESSING OFFICER U/S.143(3) WHEN HE PROPOSED TO HOLD THAT CERTAIN DISALLOWANCES NAMELY, DIESEL EXPENS ES, REPAIRS AND MAINTENANCE OF VEHICLES AND DEPRECIATION OF VEHICLES COULD NOT BE ALLOWED TO THE ASSESSEE UNDER THE PROVISIONS OF SECTION 44AE. HE MADE CERTAIN ADDITIONS/DISALLOWANCE BY COMPUTING THE INCOME AT 6,73,895 WHICH WAS APPEALED AGAINST BEFORE THE FIRST APPELLATE AUTHORITY. THE LEARNED CIT(A) NOTED THAT THE RENDERING OF INCOME BY THE ASSESSEE ON OWNING A TRUCK WAS ONLY FOR THE PERIOD FROM 1.4.2005 TO 16.4.2005 WHEN THE VARIOUS EXPENDITURES HAVE BEEN I NCURRED THROUGHOUT THE YEAR. HE, THEREFORE, CONFIRMED THE DISALLOWANCE AS COMPUTED BY THE ASSESSING OFFICER FOR WANT OF FURTHER DETAILS AND INFORMATION AVAILABLE ON RECORD. THE LEARNED CIT(A) CONFIRMED THE SAME AS NO FURTHER MATERIAL HAD BEEN BROUGH T ON RE CORD VIS - - VIS THE INFORMATION AVAILABLE TO IT REGARDING THE MOVEMENT OF THE TRUCK VIS - - VIS THE CLAIM OF THE EXPENSES. 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LEARNED DR HAS RELIED ON THE ORDER OF THEAO I NDICATING THAT THE ASSESSEE WAS NOT TO BE ALLOWED THE VARIOUS EXPENSES HAVING RENDERED INCOME UNDER THE PROVISIONS OF SECTION 44AE WHICH HE HAD DIRECTLY INCORPORATED IN THE BALANCE SHEET AS ADDITION TO THE CAPITAL AND NOT ROUTED THROUGH THE P & L ACCOUNT. 4. THE ASSESSEE HAS NOT BEEN RENDERED JUSTICE IN COMPUTING THE INCOME INSOFAR AS IT WAS NEVER THE CASE OF THE ASSESSEE TO RENDER INCOME U/S.44AE SOLELY ON THE BASIS OF OWNING A TRUCK WHICH HE RENDERED BY WAY OF ADDITION TO HIS INCOME IN THE CAPITAL ACCOU NT. THE ASSESSEE HAD BEEN RECEIVING THE ITA NO.310/CTK/2011 3 TRANSPORTATION CHARGES AMOUNTING TO 1 1 .21 LAKHS WHICH WERE AFTER INCURRING EXPENSES ON DIESEL, REPAIRS AND MAINTENANCE ETC. THEREFORE, FOR REASONS BEST KNOWN TO THE ASSESSEE THE INCOME ON ACCOUNT OF TRUCK PLYING HAS BEEN INCLUDED WHEN THE ASSESSING OFFI CER NOTED THAT THE ASSESSEE IS I N WHOLESALE BUSINESS BEING DEALER IN KEROSENE OIL. THE ASSESSEE WAS OWNING A TANKER THEREFORE REQUIRED THE ASSESSEE TO MAINTAIN A LOG BOOK FOR TRANSPORT OF KEROSENE OIL BEING A REGULATED COMMODITY WAS TO EARN FROM ITS TRANSPORTATION AFTER INCURRING EXPENSES ON DIESEL AND THE REPAIRS AND MAINTENANCE OF THE TRUCK WHETHER OWNED OR HIRED. THEREFORE, THE LEARNED CIT(A) AND THE ASSESSING OFFICER HAVE NOT RENDERED PROPER COMPUTATION O F THE INCOME RETURNED BY THE ASSESSEE IN THE LIGHT OF THE FACT THAT THE ASSESSEE IN ORDER TO HOLD THAT INCOME AS HAD BEEN RENDERED UNDER THE PROVISIONS OF SECTION 44AE WAS NOT TO BE DENIED EXPENSES INCURRED FOR THE BUSINESS OF TRANSPORTATION, HIRING CHARG ES RECEIVED FROM OTHER CONTRACTEES. ON THE SOLE ISSUE, THEREFORE, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER FOR AFFORDING OPPORTUNITY TO THE ASSESSEE AND TO COMPUTE THE INCOME OF THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF THE I.T.ACT,1961. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. S D/ - S D/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 12.08.2011 H.K.P ADHEE, SENIOR PRIVATE SECRETARY. ITA NO.310/CTK/2011 4 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: SRI SATYANARAYANA DEO, PROP. SUMITRA ENTERPRISES, GOUTAM NAGAR, KORAPUT, DIST. KORAPUT 2. THE RESPONDENT: INCOME - TAX OFFICER, WARD 2, JEYPORE. 3. THE CIT, 4. THE CIT(A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.