ITO, Namakkal V. M/s. Sengam Transports, Namakkal

ITA 648/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64225 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 29-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K RAJAGOPAL JT
• Assessee Lawyers: G BASKAR
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI [BEFORE SHRI N.S. SAINI , ACCOUNTANT MEMBER AND SHRI V. DURGA RAO , JUDICIAL MEMBER ] I.T.A.NO. 648 /MDS/2012 ASSESSMENT YEAR : 2008 - 09 THE INCOME TAX OFFICER WARD I(1) NAMA KKAL VS M/S SENGAM TRANSPORTS NO.130 - E SALEM ROAD NAMAKKAL [PAN ABAFS6875Q] ( APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. RAJAGOPAL, JT. CIT RESPONDENT BY : SHRI G. BASKAR, A DVOCATE DATE OF HEARING : 27 - 08 - 2012 DATE OF PRONO UNCEMENT : 30 - 08 - 2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A), SALEM, DATED 9.12.2011. 2 . THE SOLE GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE CIT(A) WAS NOT JUSTIFIED IN OBSERVING THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN ESTIMATING THE INCOME OF THE ASSESSEE FROM 93 VEHICLES AT ` 42,000/ - PER VEHICLE AND THEREBY DETERMINING THE INCOME AT ` I.T.A.NO. 648/12 : - 2 - : 39,06,000/ - AND DIRECTING THE ASSESSING OFFICER TO ACC EPT THE RETURNED INCOME OF THE ASSESSEE AT ` 4,88,254/ - . 3 . ON APPEAL, THE CIT(A) DECIDED THE ISSUE BY OBSERVING AS UNDER: 6. THE AR SUBMITS THAT THE VEHICLES ARE NOT ORDINARY LORRIES, BUT WITH BODIES SPECIFICALLY FOR TRANSPORTING WET CONCRETE READY MIX TO PLACES, WHERE CIVIL CONSTRUCTION WORKS ARE BEING CARRIED ON. WHENEVER THE CONTRACTEES REQUIRE, THE VEHICLES CARRY THE CONCRETE READY MIX IMMEDIATELY TO THE WORK PLACES, BEFORE THEY GET DRY. IT IS EXPLAINED THAT THEY RUN EMPTY ON RETURN TRIPS AS THEY ARE NOT FIT FOR CARRYING ON ANY OTHER GOODS. THE APPELLANT HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNT. WHILE THE APPELLANT ADMITTED 0.5% OF GROSS RECEIPTS OF ` 9,76,50,738 CRORES AS INCOME, THE ASSESSING OFFICER APPLIED PROVISIONS OF SEC. 44AE AND ESTIMA TED THE INCOME PER VEHICLE PER ANNUM AT A RATE OF' 10,50,007 PRESCRIBED BY THE SECTION. IT IS POINTED OUT BY THE AR THAT THE PROVISIONS OF SECTION 44AE ARE APPLICABLE ONLY TO THOSE ASSESSES, WHO OWN TEN OR LESS NUMBER OF VEHICLES. I HAVE NO HESITATION T O AGREE WITH THE ARGUMENT OF THE AR AND ALSO RELYING ON MY PREDECESSORS ORDER FOR A.Y 2007 - 08 IN ITA NO.149/09 - 10 DATED 28.10.2010, HOLD THAT THE AO SHOULD NOT HAVE INVOKED THE PRESUMPTIVE PROVISIONS OF SEC 44AE TO THE APPELLANT S CASE. EXPLANATION 5 TO SECTION 32(1) REQUIRES THAT DEPRECIATION SHOULD BE ALLOWED ON ASSETS WHILE COMPUTING TAXABLE INCOME, WHETHER CLAIMED OR NOT. IN THIS CASE, THE APPELLANT HAS NOT CLAIMED DEPRECIATION BUT HAS ESTIMATED INCOME AT 0.5% ON GROSS TRANSPORT RECEIPTS. AS THE AO HAS APPLIED SECTION 44AE, DEPRECIATION IS DEEMED TO HAVE BEEN ALLOWED IN THE ASSESSMENT IN VIEW OF THE CONTENTS OF SECTION 44AE(3). 7. THE FACTUAL POSITION REMAINING THAT THE APPELLANT HAS RETURNED AN INCOME OF ` 4,88,254 AFTER CLAIMING DEPRECIATI ON OF ` 3,66,84,386. A COPY OF DEPRECIATION STATEMENT HAS BEEN FILED BEFORE ME. THE GROSS INCOME BEFORE DEPRECIATION FOR THE YEAR THUS WORKS OUT TO ` 3,71,72,640 FOR 93 VEHICLES. EVEN OTHERWISE, GROSS INCOME OF ` 3,71,72,640 FOR 93 VEHICLES AMOUNTS TO AN AVERAGE OF ` 3,99,705 PER VEHICLE. THIS APPEARS QUITE REASONABLE AND HENCE ACCEPTABLE. I DIRECT THE AO TO ACCEPT THE INCOME OF ` 4,88,254 RETURNED BY THE APPELLANT. I.T.A.NO. 648/12 : - 3 - : 4 . THE DR VEHEMENTLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER WHEREAS THE A.R OF TH E ASSESSEE FILED BEFORE US A COPY OF THE ORDER OF THIS TRIBUNAL IN ASSESSEE S OWN CASE DATED 28.7.2011 PASSED IN I.T.A.NO.2189/MDS/2010 FOR ASSESSMENT YEAR 2007 - 08 AND SUBMITTED THAT ON THE VERY SAME ISSUE AND FACTS OF THE CASE, THE TRIBUNAL HAS UPHELD TH E ORDER OF THE CIT(A) AND DISMISSED THE APPEAL OF THE REVENUE . THEREFORE, FOLLOWING THE SAME, THE APPEAL OF THE REVENUE SHOULD DISMISSED. 5 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON REC ORD. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNT. FURTHER IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE OWNED MORE THAN 10 GOODS CARRIAGE AND THEREFORE, THE PROVISIONS OF SECTION 44AE ARE NOT ATT RACTED IN THE CASE OF THE ASSESSEE. THUS, IN OUR CONSIDERED OPINION, THE ACTION OF THE ASSESSING OFFICER IS INDEFENSIBLE IN APPLYING THE PROVISIONS OF SECTION 44AE OF THE ACT. WE FIND THAT ON SIMILAR FACTS IN THE CASE OF THE ASSESSEE ITSELF IN ASSES SMENT YEAR 2007 - 08, THE TRIBUNAL HAS HELD AS UNDER: 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. I N INSTANT CASE, IT IS NOT DISPUTED THAT THE ASSESSEE HAS NOT MAINTA INED PROP ER BOOKS OF ACCOUNT. FURTHER, IT IS ALSO NOT IN DISPUTE THAT ASSESSEE OWNED MORE THAN TEN GOODS CARRIAGE AND THEREFORE, PROVISIONS OF SECTION 44AE IS NOT ATTRACTED IN THE CASE OF ASSESSEE. THUS, IN OUR CONSIDERED OPINION, THE ACTION OF ASSESSING OFFICE R IS INDEFENSIBLE IN APPLYING THE I.T.A.NO. 648/12 : - 4 - : PROVISIONS OF SE CTION 44AE OF THE ACT. FURTHER, WE FIND THAT THE LD. CIT (A) HAS OPINED THAT THE INCOME OF ` 4,10,843/ - BEFORE DEPRECIATION PER VEHICLE WAS DISCLOSED BY THE ASSESSEE ON ESTIMATE BASIS AND IN THE OPINION OF THE LD. CIT(A), THE SAID AMOUNT WAS REASONABLE. NO MATERIAL WAS BROUGHT BEFORE US BY THE REVENUE TO SHOW ANY ERROR IN THE ORDER OF THE LD. CIT(A). THE REVENUE HAS ALSO NOT BROUGHT ANY MATERIAL TO SHOW AS TO WHY THE INCOME BEFORE DEPRECIATION OF ` ` 4,10,843/ - PER VEHICLE WAS NOT' REASONABLE AND SAME SHOULD HAVE BEEN ESTIMATED AT A HIGHER FIGURE. WE, THEREFORE, DO NOT FIND ANY GOOD REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT IS CONFIRMED. GROUND TAKEN BY THE REVENUE IS DISMISSED . 6 . NO D ISTINGUISHING FEATURES COULD BE POINTED OUT BY THE DR. HE COULD NOT ALSO BRING ANY MATERIAL TO SHOW THAT THE ABOVE QUOTED ORDER OF THE TRIBUNAL WAS UPHELD AGAINST AND WAS VARIED IN APPEAL BY ANY HIGHER FORUM. RESPECTFULLY FOLLOWING THE ABOVE QUOTED ORDER OF THE TRIBUNAL, WE CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE GROUND OF APPEAL OF THE REVENUE. 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THURSDAY, THE 30 TH OF AUGUST , 2012 , AT CHENNAI . SD/ - SD/ - ( V. DURGA RAO ) JUDICIAL MEMBER ( N.S.SAINI ) ACCOUNTANT MEMBER DATED: 30 TH AUGUST , 2012 RD COPY TO: APPELLANT / RESPONDENT / CIT(A) /CIT/ DR