Thiruvengatam Vinayagam, Chennai V. ITO, Non Corp Ward -10(5), Chennai

ITA 75/CHNY/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 0058 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Appeal Filed On: 08-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MATHIVANAN
• Assessee Lawyers: MEERA SURESH
• Keywords: Presumptive income; Depreciation; Revised return; TDS
• Section: 143(3); 40(a)(ia)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, C (SMC) BENCH : CHENNAI , . , [BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] !' ./I.T.A. NO.75/CHNY/2019. #$% &$ / ASSESSMENT YEAR : 2015-2016. THIRUVENGATAM VINAYAGAM, NO.2/9, BYE PASS ROAD, RED HILLS, CHENNAI 600 052. VS. THE INCOME TAX OFFICER, NON CORPORATE WARD 10(5) CHENNAI. [PAN AAGPV 1428F] ( / APPELLANT) ( /RESPONDENT) !' '( ) * / APPELLANT BY : MS. MEERA SURESH, FCA +,'( ) * /RESPONDENT BY : SHRI. MATHIVANAN, IRS, JCIT # - ) . /DATE OF HEARING : 08-05-2019 /0&% ) . /DATE OF PRONOUNCEMENT : 30-05-2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1 2, CHENNAI (CIT(A) FOR SHORT) DATED 18.12.2018 FOR THE ASSES SMENT YEAR (AY) 2015- 2016. ITA NO.75 /2019 :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE LOWER AUTHORITIES IS SO FAR IT IS PREJUDICIAL TO THE INTEREST OF THE APPELLANT AND TH E SAME IS BAD AND ERRONEOUS IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT-[A] ERRED IN NOT DIRECTING THE AS SESSING OFFICER TO COMPUTE THE TAXABLE INCOME UNDER SECTION 44AE OF THE ACT CONSIDERING THE NATURE OF ASSESSEES BUSI NESS. THE ASSESSEE RELY ON THE JUDGMENT OF THE HONORABLE INCOME TAX APPELLATE TRIBUNAL, SURAT IN THE CASE OF GAYATHR I CORPORATION VS. INCOME TAX OFFICER, WARD-5(1) SURAT IN ITA NO.1099/AHD1204. 3. THE LEARNED CIT-[A] ERRED IN CONFIRMING THE ADDIT ION MADE BY THE ASSESSING OFFICER UNDER SECTION 40(A)(IA) OF THE ACT AMOUNTING TO RS.2,69,536/- BEING INTEREST PAID TO NBFCS WITHOUT DEDUCTION OF TDS. 4. THE LEARNED CIT-[A] ERRED IN CONFIRMING THE ADDIT ION MADE BY THE ASSESSING OFFICER TOWARDS FC CHARGES AMOUNTING TO RS.5,37,610/-. 5. THE LEARNED CIT-[A] ERRED IN CONFIRMING THE ADDIT ION MADE BY THE ASSESSING OFFICER AMOUNTING TO RS.2,07,387/- UNDER SECTION 40(A)(3) OF THE ACT. 6. THE LEARNED ASSESSING OFFICER ERRED IN MAKING ADD ITION OF FC CHARGES AMOUNTING TO RS. 5,66,667/-. 7. THE APPELLANT CRAVES LEAVE OF THE LEARNED HONBLE INCOME TAX APPELLATE TRIBUNAL, TO ADD, DELETE, AMEND OR OTH ERWISE MODIFY ONE OR MORE OF THE ABOVE GROUNDS EITHER 3. T HE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL ENGAGED IN THE BUSIN ESS OF LORRY TRANSPORT. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2015-16 WAS FILED ON 29.09.2015 DISCLOSING TOTAL INCOME OF RS. 7,32,560/-. AGAINST THE ITA NO.75 /2019 :- 3 -: SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY INCOME TAX OFFICER, NON CORPORATE WARD, 10(5), CHENNAI (IN SHO RT THE AO), VIDE ORDER DATED 06.11.2017 PASSED U/S. 143(3) OF THE IN COME TAX ACT, 1961 (FOR SHORT THE ACT) AT TOTAL INCOME OF RS. 49,07, 530/- AFTER MAKING THE FOLLOWING ADDITIONS:- (I) EXCESS CLAIM OF DEPRECIATION TO BE DISALLOWED 9,09,500 (II) ADDITION U/S.40A(3) REPAIRS AND MAINTENANCE 2,52,507 (III) PRIOR PERIOD AND SUBSEQUENT PERIOD EXPENDITURE BOOKED UNDER THE HEAD REPAIRS AND MAINTENANCE DISALLOWED 3,43,270 (IV) ADDITION U/S.40A(3) FC CHARGES 5,37,610 (V) DISALLOWANCE UNDER THE HEAD FC CHARGES 5,66,667 (VI) ADDITION U/S.40A(3) DRIVER & CLEANER SALARY 77,604 (VII) DISALLOWANCE UNDER THE HEAD NATIONAL PERMIT EXPENSES 5,87,500 (VIII) DISALLOWANCE UNDER THE HEAD INTEREST EXPENSES 6,15,926 (IX) DISALLOWANCE U/S.40(A)(IA) INTEREST PAID TO NBFC WITHOUT TDS) 2,69,536 (X) DISALLOWANCE U/S.40(A)(IA) PROFESSIONAL CHARGES PAID WITHOUT TDS 14,850 ITA NO.75 /2019 :- 4 -: 4. BEING AGGRIEVED BY THE ABOVE ADDITIONS, THE ASSESS EE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO VIDE IMP UGNED ORDER DELETED THE ADDITIONS MADE BY THE ASSESSING OFFICER ON DELI VERY CHARGES, PRIOR PERIOD EXPENSES, PROFESSIONAL CHARGES, BANK INTERES T AND NATIONAL PERMIT CHARGES AND THE BALANCE ADDITIONS HAD BEEN CONFIRME D. 5. B EING AGGRIEVED BY THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THE APPELLANT IS IN APPEAL B EFORE US IN THE PRESENT APPEAL. IT IS CONTENDED BEFORE US THAT THOUGH THE PROVISION OF PRESUMPTIVE TAXATION U/S.44AE OF THE ACT ARE NOT S TRICTLY APPLICABLE TO THE ASSESSEE, GUIDANCE CAN BE TAKEN FROM THE PROVISIO N OF SECTION 44AE AND PRESUMPTIVE RATE OF TAX CAN BE APPLIED PLACING RELIANCE ON THE DECISION OF AHMADABAD BENCH ( CAMP AT SURAT) OF THE TRIBUNAL IN THE CASE OF GAYATRI CORPORATION VS. ITO IN ITA NOS.894 & 1099/AHD/2014, DATED 05.04.2017. 6. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE ASSESSING OFFICER MADE SEVERAL DISALLO WANCE RESULTING IN ASSESSED INCOME TWO OR THREE TIMES HIGHER THAN THE RETURNED INCOME. ASSESSEE IS ENGAGED ONLY IN TRANSPORT BUSINESS OWNI NG SIXTEEN VEHICLES. THE DISPUTE IS ONLY WITH REGARD TO ESTIMA TION OF INCOME THOUGH PROVISIONS OF SECTION 44AE OF THE ACT ARE NOT STRIC TLY APPLICABLE. THE ITA NO.75 /2019 :- 5 -: AHMADABAD BENCH OF THE TRIBUNAL IN THE CASE OF KESHARBHAI GHARMARBHAI CHAUDHARY VS. ITO, 23 TAXMANN.COM 273 HAD HELD AS UNDER:- 4. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IT IS NO T IN DISPUTE THAT THE ASSESSEE WAS PLYING THE GOODS CARRIAGE WHICH WE RE FOUR. THEREFORE, THE NUMBER OF GOODS CARRIAGES PLIED BY T HE ASSESSEE WAS WELL WITHIN THE AMBIT OF THE SECTION 44AE. THE ASSE SSING OFFICER HAS REJECTED THE BOOK RESULT AND HAS ESTIMATED THE INCO ME BY MAKING VARIOUS DISALLOWANCE OUT OF THE EXPENSES CLAIMED BY THE ASSESSEE. HE ALSO ENHANCED THE RECEIPT SHOWN BY THE ASSESSEE. THE ESTIMATED DISALLOWANCE MADE BY THE AO WERE PARTLY REDUCED BY THE CIT(A). THEREFORE, UNDISPUTEDLY, IN THE ASSESSEE'S CASE, TH E ACTUAL DISPUTE IS ONLY WITH REGARD TO ESTIMATION OF THE INCOME FROM T RUCKS PLYING BUSINESS. IN OUR OPINION, WHEN THE LEGISLATURE HAS PROVIDED SOME FORMULA FOR ESTIMATION OF INCOME IN THE CASE OF A T RANSPORTER, WHO OWNS LESS THAN TEN GOODS CARRIAGES, THERE WOULD NOT BE ANY JUSTIFICATION FOR NOT ESTIMATING THE INCOME OF THE ASSESSEE AS PER THE FORMULA PRESCRIBED IN SECTION 44AE. IT IS IRRELEVAN T WHETHER THE REVISED RETURN FURNISHED BY THE ASSESSEE IS ITA NO. 2626/AHD/2010 KESHARBHAI G.CHAUDHARY VS. ITO ASST.YEAR - 2006-07 VALID OR NOT. WHEN THE QUESTION OF ESTIMATION OF THE INCOME OF A TRANSPORTER COMES, SECTION 44AE IS A GOOD GUIDELINE IN THE CASE OF TRANSPORTER WHO OWNS LESS THAN TEN GOODS CARRIAGE. IN VIEW OF T HE ABOVE, WE DIRECT THE AO TO DETERMINE THE INCOME OF THE ASSESS EE AS PER THE SECTION 44AE OF THE IT ACT.' AND THIS DECISION WAS FOLLOWED BY AHMADABAD BENCH (CAMP AT SURAT) OF THE TRIBUNAL IN THE CASE OF GAYATRI CORPORATION (SU PRA). IN OUR OPINION, IT IS A FIT CASE TO ESTIMATE THE PROFIT PROVISION FRO M PLYING TRUCKS AT THE RATE ITA NO.75 /2019 :- 6 -: PRESCRIBED UNDER THE PROVISIONS OF SECTION 44AE OF THE ACT. ACCORDINGLY, WE DIRECT THE LD. ASSESSING OFFICER TO COMPUTE THE PROFIT FROM PLYING TRUCKS BY APPLYING THE PROVISIONS OF SECTION 44AE O F THE ACT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED ON 30TH DAY OF MAY, 2019, AT CHE NNAI. SD/- SD/- ( . ! ) (DUVVURU RL REDDY) ' # /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER 1 #- / CHENNAI 2# / DATED: 30 TH MAY, 2019. KV 3 ) +.4 5' !6 5&. / COPY TO: 1 . !' '( / APPELLANT 3. 7. (!' ) / CIT(A) 5. 5 :; +.#< / DR 2. +,'( / RESPONDENT 4. 7. / CIT 6. ;$ =- / GF