M/s. Bir Bhola Truck Union, Bathinda V. The Income-tax Officer, Bathinda

ITA 743/ASR/2013

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6997 (ITAT-AMRITSAR)
• Duration Of Justice: 5 year(s) 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 22-04-2019
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K R JAIN
• Keywords: Business income; TDS
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO. 743/ASR/2013 AS SESSMENT YEAR: 2008-09 BIR BHOLA TRUCK UNION, MALOUT ROAD, BATHINDA [PAN: AAAAB 1384R] VS. INCOME TAX OFFICER, WARD 2(1), BATHINDA (APPELLANT) (RESPONDENT) APPELLANT BY : SH. K. R. JAIN (ADV.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 22.04.2019 DATE OF PRONOUNCEMENT: 29.04.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS), BATHINDA ('CI T(A)' FOR SHORT) DATED 02.9.2013, DISMISSING THE ASSESSEES APPEAL CONTEST ING ITS ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) DATED 30.12.2010 FOR THE ASSESSMENT YEAR (AY) 2008-09. 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE ASSE SSEES COUNSEL, SH. JAIN, THAT THE ISSUES ARISING IN THE INSTANT APPEAL ARE THE SA ME AS STAND DECIDED BY THE TRIBUNAL PER ITS DECISION IN GIDDARBAHA JANTA TRUCK UNION V. ASSTT. CIT (IN ITA NO. 660/ASR/2013, DATED 28.08.2018), PLACING A COPY OF THE SAME ON RECORD. THE APPELLANT IN THAT CASE HAD RAISED THE ISSUE OF MUTU ALITY AS WELL AS, IN THE ALTERNATIVE, THE QUANTIFICATION OF THE INCOME, I.E., WHERE THE S URPLUS ARISING TO THE ASSESSEE IS ITA NO. 743/ASR/2013 (AY 2008-09) BIR BHOLA TRUCK UNION V. ITO 2 DEEMED AS INCOME U/S. 2(45) OF THE ACT. THE TRIBUNA L DID NOT ACCEPT THE ASSESSEES PLEA TOWARD MUTUALITY; ITS CONTRACT RECEIPTS BEING FROM OUTSIDE PERSONS TO WHOM TRANSPORTATION SERVICES ARE PROVIDED. THE BUSINESS INCOME WAS ESTIMATED AT 1.5% OF THE GROSS CONTRACT RECEIPT. THE SAID ORDER, ACCO RDINGLY, COVERS THE INSTANT APPEAL ON ALL FOURS, AND THE ASSESSEE PLACES FULL RELIANCE THEREON. 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERI AL ON RECORD. THE ASSESSEE IN THE INSTANT CASE, AS IN GIDDARBAHA JANTA TRUCK UNION (SUPRA), IS AN ASSOCIATION OF PERSONS (AOP), FORMED BY INDIVIDUALS OWNING ONE OR MORE TRUCKS. IT ENTERS INTO CONTRACTS FOR TRANSPORT ATION OF GOODS, BEING ADMITTEDLY FORMED TO PROVIDE OPTIMUM GAIN FOR ITS MEMBERS, THE TRUCK OWNERS, BY AVOIDING INTERNAL COMPETITION BETWEEN THEM AS WELL AS SECURI NG COLLECTIVE BARGAINING. THE ASSESSEES CASE, WHICH DID NOT FIND FAVOUR WITH THE REVENUE, IS THAT ENTIRE TRANSPORTATION CHARGES ON THE BASIS OF THE GOODS RE CEIPT NOTES (GRNS) ARE PASSED ON TO THE MEMBERS, SO THAT NO INCOME ARISES TO IT. THE SAME HAS ACCORDINGLY BEEN ASSESSED AT 2% OF THE CONTRACT RECEIPT. THE TRIBUNA L IN GIDDARBAHA JANTA TRUCK UNION (SUPRA), AGAIN, DID NOT ACCEPT THE ASSESSEES CLAI M OF NO INCOME HAVING ARISEN TO IT AS THE ENTIRE RECEIPT, INCLUDING TAX D EDUCTED AT SOURCE WHICH IS AT 2%, IS PASSED ON TO THE TRUCK OWNERS. TDS HAD BEEN DEDU CTED AT THE RATE OF 2% AND, ACCORDINGLY, THE SAME, IT OPINED, STANDS RETAINED B Y THE ASSESSEE-UNION. ALLOWING ANOTHER 0.5% TOWARD EXPENDITURE, THE NET PROFIT WAS ESTIMATED AT 1.50%. THE TRIBUNAL NOTED SEVERAL DECISIONS BY THE TRIBUNAL, A DOPTING DIFFERENT PERCENTAGES, BEING RELIED UPON BY EITHER SIDE. IN THE PRESENT CA SE, THE ASSESSEE, NOT MAINTAINING ANY BOOKS OF ACCOUNT, HAS RETURNED A NET PROFIT OF RS. 1,00,939 EVEN AS ITS GROSS CONTRACT RECEIPT IS AT RS. 369.08 LACS. IT IS NOT C LEAR IF THE SAME INCLUDES ANY OTHER INCOME, I.E., BESIDES CONTRACT RECEIPT, EVEN AS IT DOES NOT APPEAR TO BE SO AS THE ASSESSING OFFICER HAS ASSESSED THE INCOME BY ESTIMA TING IT, APPLYING A RATE. NO ITA NO. 743/ASR/2013 (AY 2008-09) BIR BHOLA TRUCK UNION V. ITO 3 DISTINGUISHING FEATURE/S COULD BE POINTED OUT BY TH E LD. DEPARTMENTAL REPRESENTATIVE (DR) WHEN CALLED UPON BY THE BENCH D URING HEARING TO DO SO. ACCORDINGLY, FOLLOWING THE SAME, IT IS HELD AS UNDE R: (A) THE ASSESSEES CONTENTION OF IT BEING A MUTUAL CONCERN IS REJECTED; (B) THE CONTRACTUAL (BUSINESS) INCOME IS TO BE ASSE SSED AT 1.5% OF THE ASSESSEES GROSS CONTRACT RECEIPT; C). THE OTHER INCOME OF THE ASSESSEE, IF ANY, VIZ. INTEREST, IS TO BE ASSESSED UNDER THE REGULAR PROVISIONS OF LAW; AND D). NO INCOME IS TO BE IMPUTED IN RESPECT OF THE CO NTRIBUTION FROM THE MEMBERS AS, WITHOUT DOUBT, TO THAT EXTENT, THE SURPLUS WOULD AT TRACT MUTUALITY. (THIS IS CLARIFIED AS IT MAY NOT BE THAT THE GROSS RECEIPT OF RS. 369. 08 LACS INCLUDES INCOME APART FROM CONTRACT RECEIPT AS WELL) REFERENCE TOWARD THIS IS MADE TO PARAS 3 AND 4 OF T HE ORDER BY THE TRIBUNAL IN GIDDARBAHA JANTA TRUCK UNION (SUPRA), WHICH, AS WAS THE COMMON CONTENTION OF THE PARTIES, SQUARELY COVERS THE FACTS OF THE PRESE NT CASE. I DECIDE ACCORDINGLY. 4. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. ORDER PRONOUNCED IN THE OPEN CO URT ON APRIL 29, 2019 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 29.04.2019 /GP/SR. PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: BIR BHOLA TRUCK UNION, MALOU T ROAD, BATHINDA (2) THE RESPONDENT: INCOME TAX OFFICER, WARD 2( 1), BATHINDA (3) THE CIT(APPEALS), BATHINDA (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER