Pavit Pal Singh, Sirhind V. ACIT, Circle, Mandi Gobindgarh

ITA 458/CHANDI/2019

AI Insights

The case involves appeals by Pavit Pal Singh against the order of the CIT(A), Patiala, which upheld the additions made by the Assessing Officer to the truck income of the assessee for the assessment years 2013-14 and 2014-15. The Assessing Officer had estimated the truck income based on an average income per truck per month, due to the non-production of documents by the assessee. The CIT(A) reduced the estimated income but did not delete the additions. The Tribunal, referencing a similar case for the assessment year 2009-10 where the additions were deleted, decided to delete the additions for the years in question as well.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115345 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 01-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 10-04-2019
• Other Referred Cases: S Kesar Singh vs. ITA No 485/Chandi/2008, CIT Vs Winsome Textile Industries Ltd (2009) 319 ITR 204(P& H), CIT V/s Lakhani Marketing Ltd (2nd April 2014) ITA no 970 of 2008( P& H), CIT V/s Shivam Motors (P) LTD (decision dated 5th May 2014 in ITA No 88/2014), CIT V/s Hero Cycles LTD (2010)323 ITR 518 (P & H), Cheminvest Ltd V/s CIT in ITA no 749/2014 dated 02.09.2015
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income
• Section: 14A; 13; 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH “B”, CHANDIGARH BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER ITA No.457 & 458/CHD/2019 Assessment Year: 2013-14 & 2014-15 Pavit Pal Singh C/o M/s Patiala Bus Service (P) Ltd. Sirhind v. The ACIT Gobindgarh PAN:AGFPS2794E (Appellant) (Respondent) Appellant by: Shri Gunjeet Singh Syal, Advocate Respondent by: Shri Akashdeep, D.R. Date of hearing: 02 03 2023 Date of pronouncement: 13 03 2023 O R D E R PER A.D. JAIN, V.P.: These are assessee’s appeals against the common order dated 24.1.2019 of the ld. CIT(A), Patiala, for Assessment Years 2013-14 and 2014-15. 2. The brief facts of the case are that in assessment year 2013-14, the assessee owned 32 trucks. He showed receipts of Rs.21 lakhs. For assessment year 2014-15, the assessee was owner of 29 trucks and he showed truck receipts of Rs.18,77,500/-. Since the assessee had not produced documents concerning the receipts and expenditure, the Assessing Officer was not satisfied with the correctness and completeness of the assessee’s accounts. The Assessing Officer, therefore, completed the assessment for both the years, on the basis of his best judgment, in the manner provided under section 145(3) of the Income Tax Act. The truck income of the assessee was estimated, for which purpose, the Assessing Officer took the average income from plying of trucks at Rs.8,000/- per month, as against that of Rs.5,500/- declared by the assessee for assessment year 2013-14 and of Rs.5,400/- declared for assessment year 2014-15. As such, the Assessing Officer made addition of Rs.9.72 lakhs for assessment year 2013-14 and of Rs.9,06,500/- for assessment year 2014-15. The ld. CIT(A), by virtue of the impugned order, estimated the truck income at Rs.8,000/- per month per truck, for both the years. Aggrieved, the assessee is in appeal. 3. Challenging the impugned order, the ld. Counsel for the assessee has contended that under identical circumstances, for assessment year 2009-10, in the assessee’s own case, the ld. CIT(A) had deleted the entire addition. The ld. DR, on the other hand, has contended that as available from record, no details at all were filed by the assessee and, therefore, the only recourse left with the Assessing Officer was estimation; and that the estimation ordered by the Assessing Officer has been appropriately reduced by the ld. CIT(A); and that the assessee is not entitled to any further relief, the ld. CIT(A) having already granted relief to the assessee. 4. Having heard the parties and having perused the material on record, we find that under exactly similar circumstances as those attending the years under consideration, for assessment year 2009-10, by virtue of order dated 14.6.2016, a copy whereof has been placed on record, the ld. CIT(A) deleted the addition of Rs.4,27,500/- on account of truck income, qua 12 trucks, by holding as follows: “The facts of the case have been perused, the contentions of the AO in the assessment order and the rival submissions of the AR have been considered. The assessee is an individual involved in the business of running trucks on hire. During the year assessee had shown income from 38 trucks. The A.O has accepted the receipts from 26 trucks as declared by assessee but in case of 12 trucks instead of Rs 6,375/- per truck per month as declared by the assessee. But for other 12 trucks the A.O has estimated the income as Rs 8750/- per truck per month. While making addition the A.O has not given any basis as to how he has estimated the income at Rs 8750/- per month instead of Rs.6375/- per month. The Hon'ble ITAT in the case of S Kesar Singh in ITA No 485/Chandi/2008 who is father of the assessee and in the similar business had accepted Rs.22,000/- per annum as income from each truck. Since in the present case assessee has declared income higher than the income accepted by ITAT in a similar case there is no reason to deviate from the order of higher court on similar facts. Accordingly the addition of Rs.4,27,500/- on account of Truck Income is deleted. Ground No 4 & 5: The disallowance of Rs.1,23,380/- has been made by invoking the provisions of sec 14A. The A.O has observed that during the year under consideration no income has been received from investment in shares. It has been held by jurisdictional High Court as well as other courts that to invoke the provisions of sec 14A the assessee must have exempt income then only disallowance u/s 14A can be worked out. It was decided in: CIT Vs Winsome Textile Industries Ltd (2009) 319 ITR 204(P& H) CIT V/s Lakhani Marketing Ltd (2nd April 2014) ITA no 970 of 2008( P& H) CIT V/s Shivam Motors (P) LTD ( decision dated 5th May 2014 in ITA No 88/2014) CIT V/s Hero Cycles LTD (2010)323 ITR 518 (P & H) The Hon'ble Delhi High Court in the case of Cheminvest Ltd V/s CIT in ITA no 749/2014 dated 02.09.2015 has considered all the decisions quoted above and held that where there is no exempt income provisions of sec 14A cannot be invoked. In view of decisions of superior courts the disallowance made of Rs.1,23,380/- u/s 14 A is accordingly deleted. As a result appeal is allowed.” 5. The facts for the years under consideration being, mutatis mutandis, exactly similar to those attending assessment year 2009-10, we delete the additions qua these two years. Ordered accordingly. 6. In the result, both the appeals are allowed. Order pronounced in the open Court on .../03/2023. Sd/- Sd/- [VIKRAM SINGH YADAV] [A. D. JAIN] ACCOUNTANT MEMBER VICE PRESIDENT DATED:...13/03/2023 JJ: Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR By order Assistant Registrar