S. Harjit Singh, Sirhind V. DCIT, Mandi Gobindgarh

ITA 934/CHANDI/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80872 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 22-07-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 21-09-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: PREM SINGH
• Keywords: Reopening of assessment; Depreciation
• Section: 148; 144

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 931& 932 /CHD/2011 ASSESSMENT YEARS: 2003-04 & 2005-06 SH. FATEH SINGH SIRHIND. VS. THE DCIT C/O M/S PATIALA BUS SERVICE (P)LTD. CIRCLE SIRHIND MANDI GOBINDGARH PAN: AGFPS2788G ITA NOS. 933 & 934 /CHD/2011 ASSESSMENT YEARS: 2003-04 & 2005-06 SH. HARJIT SINGH VS. THE DCIT C/O M/S PATIALA BUS SERVICE (P)LTD. CIRCLE SIRHIND MANDI GOBINDGARH PAN: AGFPS2790A ITA NOS. 935 & 936 /CHD/2011 ASSESSMENT YEARS: 2003-04 & 2005-06 SH. KESAR SINGH VS. THE DCIT C/O M/S PATIALA BUS SERVICE (P)LTD. CIRCLE SIRHIND MANDI GOBINDGARH PAN: AGFPS2791B ITA NO. 218 /CHD/2014 ASSESSMENT YEAR: 2009-10 SH. KESAR SINGH VS. THE ITO C/O M/S PATIALA BUS SERVICE (P)LTD. SIRHIND, HQ SIRHIND MANDI GOBINDGARH PAN: AGFPS2791B (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI. PREM SINGH & GURJEET SINGH RESPONDENT BY : SHRI. MANJIT SINGH DATE OF HEARING 21.8.2014 DATE OF PRONOUNCEMENT 10.9.2014 2 ORDER PER BENCH THESE APPEALS ARE FILED BY DIFFERENT ASSESSES AND ARE DIRECTED AGAINST THE ORDER DATED 13.7.2011 AND 31.12.2013 OF LD. CIT(A), PATIA LA. 2 AT THE OUT SET THE LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT IN ALL THESE APPEALS ALL THE ISSUES ARE IDENTICAL AND THE FACTS ARE IDENTICAL AND THEREFORE APPEAL OF SHRI KESAR SINGH FOR ASSESSMENT YEAR 2003-04 IN IT A NO. 935/CHD/2011 SHOULD BE TAKEN UP FOR DETAILED HEARING. THE LD. D.R FOR THE REVENUE HAD NO OBJECTION. THEREFORE ITA NO. 935/CHDE/2011 WAS TAKEN UP FOR DETAILED HEA RING. ITA NO. 935/CHDE/2011 ASSESSEES APPEAL 3 IN THIS APPEAL THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: 1. THAT THE LD. CIT(A) HAS ERRED N DETERMINING TRUC K INCOME AT RS. 43,06,000/- IN RESPECT OF 55 TRUCKS. 2. THAT FACTS AND CIRCUMSTANCES OF THE CASE SHOULD HAVE BEEN CONSIDERED PROPERLY. 3. THAT THE EXPLANATIONS FILED BY THE APPELLANT SHO ULD HAVE BEEN CONSIDERED IN PROPER MANNER. 4. THAT THE TRUCK INCOME DECLARED BY THE APPELLANT SHOULD HAVE BEEN ACCEPTED 5. THAT THE ADDITION OF RS. 8,00,000/- IN RESPECT O F ADDITIONAL INCOME FROM TRUCKS DECLARED BEFORE SETTLEMENT COMMISSION SHOULD HAVE B EEN CONSIDERED IN PROPER CONTEXT. 6. THAT THE PAST HISTORY OF THE CASE SHOULD HAVE BE EN CONSIDERED WHILE FRAMING THE IMPUGNED ORDER. 7. THAT NO ADDITION SHOULD BE MADE ON THE BASIS OF FACTS AND CIRCUMSTANCES OF THE CASE. THE RETURNED INCOME SHOULD HAVE BEEN ACCEPTED. 8. THAT ORDER IS AGAINST LAW AND FACTS OF THE CASE. WHEN IT WAS POINTED OUT TO THE LD. COUNSEL FOR THE ASSESSEE THAT GROUNDS ARE GENERAL IN NATURE AND THEREFORE HE SHOULD SPECIFY W HICH PARTICULAR GROUND HE WOULD LIKE TO PRESS, IT WAS ADMITTED THAT THE GROUNDS WERE GEN ERAL IN NATURE AND HE DOES NOT WISH TO PRESS THE ISSUES OF REOPENING OF ASSESSMENT (NO GROUND IS TAKEN UP FOR THIS ISSUE) 3 AND EVEN REJECTION OF BOOKS OF ACCOUNT IS NOT BEING PRESSED. ONLY ISSUE PRESSED WAS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ADD ITION MADE ON ACCOUNT OF ESTIMATION OF RECEIPTS OF TRUCK. 4 BRIEF FACTS OF THE CASE ARE THAT ORIGINAL RETURN DECALED AMOUNTING TO RS. 814704/- WAS FILED BY THE ASSESSEE DECLARING INCOME FROM HOU SE PROPERTY, SALARY, INCOME FROM TRUCK OPERATION. ORIGINALLY THE RETURN WAS PROCESSE D U/S 143(1). LATER ON NOTICE U/S 148 WAS ISSUED AND IN RESPONSE TO WHICH AGAIN RETURN DE CLARING INCOME OF RS. 814704/- WAS FILED BY THE ASSESSEE. THE ASSESSEE DERIVED INCOME FROM TRUCK OPERATION WHICH WAS SHOWN AS UNDER: (I) RS. 10,50,000/- FROM 42 TRUCKS @ 25,000/- PER T RUCK. (II) RS. 6,40,000/- FROM 8 TRUCKS @ 80,000/- PER TR UCK (III) RS. 6,00,000/- FROM 5 TRUCKS @ 1,20,000/- PER TRUCK RS. 22,90,000/- FROM 55 TRUCKS OUT OF THESE TOTAL RECEIPTS, NET INCOME FROM 55 TRU CKS HAS BEEN DECLARED AT RS. 6,38,635/- AFTER DEDUCTING THE FOLLOWING EXPENSES:- GROSS RECEIPTS RS. 22,90,000/- LESS: (I) DEPRECIATION RS. 13,92,128/- (II) HIRE CHARGES RS. 2,26,837/- (III) INTEREST ON LOAN RS. 32,400/- RS. 16,51,36 5/- RS. 6,38,635/- SINCE THE ASSESSEE WAS NOT MAINTAINING PROPER BOOKS OF ACCOUNT AND VOUCHERS ETC. AND BOOKS OF ACCOUNT WERE NOT PRODUCED BEFORE THE ASSES SING OFFICER, THEREFORE BOOKS OF ACCOUNT WERE REJECTED. THIS ISSUE WAS NOT PRESSED BEFORE US, THEREFORE WE ARE NOT GOING INTO FURTHER DETAIL. 5 IT WAS NOTICED THAT THE ASSESSEE HAS FILED AN APP LICATION BEFORE THE SETTLEMENT COMMISSION DECLARING INCOME OF RS. 8 LAKHS. IT SEE MS THAT THE APPLICATION WAS REJECTED BY THE SETTLEMENT COMMISSION, THEREFORE TH E ASSESSEE THROUGH A LETTER DATED 17.12.2007 OFFERED ADDITIONAL INCOME OF RS. 8 LAKHS SUBJECT TO THE CONDITION THAT NO PENALTY AND PROSECUTION WOULD BE LEVIED. THE ASSES SING OFFICER OBSERVED THAT THIS OFFER 4 WAS CONDITIONAL, THEREFORE SAME WAS NOT ACCEPTED. H OWEVER, THE SURRENDERED INCOME WAS SEPARATELY ADDED TO THE TOTAL INCOME. THEREAFTE R ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DECLARED INCOME FROM FOLLOWING HEADS B EFORE THE SETTLEMENT COMMISSION. I PROVISION FOR FINANCIAL HELP II ROUTE PERMITS III PERSONAL SERVICES IV PLYING OF TRUCKS ETC. THE ASSESSEE WAS REQUESTED TO FURNISH THE DETAILED WORKING UNDER DIFFERENT HEADS. SINCE NO DETAILS WERE FILED, THEREFORE THE ASSESSIN G OFFICER WORKED OUT THIS ADDITIONAL INCOME AS UNDER: I PROVISION FOR FINANCIAL HELP THE INCOME UNDER THIS HEAD IS CONSIDERED AT RS. 40, 000 P.A. ON ESTIMATED BASIS AND IN ABSENCE OF ANY DETAILS FURNISHED BY THE ASSESSEE. II ROUTE PERMIT IN ABSENCE OF ANY DETAIL FURNISHED BY THE ASSESSEE, THE INCOME FROM THIS SORUCE IS ESTIMATED AT RS. 30,000 P.A. III PERSONAL SERVICES IN ABSENCE OF ANY DETAIL FURNISHED BY THE ASSESSEE, THE INCOME FROM THIS SORUCE IS ESTIMATED AT RS. 30,000 P.A. IV PLYING OF TRUCKS THE ASSESSEE HAS DECLARED ADDITIONAL INCOME OF RS. 8,00,000 IN THE SETTLEMENT APPLICATION AND CONSIDERING THE QUANTUM OF INCOME F ROM THESE THREE HEADS, THE BALOANCE OF ADDITIONAL INCOME WOULD WORK OUT TO BE RS. 7,00, 000 (RS. 8,00,000 1,00,000). 6 THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSE SSEE WAS HAVING A FLEET OF 55 TRUCKS AND INCOME FROM OPERATION OF TRUCKS WAS SHOW N AT RS. 638635/- AND THE SAME WAS VERY LOW, THEREFORE SAME COULD NOT BE CONSIDERE D AS ACTUAL INCOME. HE THEN OBSERVED THAT ASSESSEE HAD FILED APPLICATION BEFORE THE SETTLEMENT COMMISSION IN THE EARLIER YEARS ALSO AS PER FOLLOWING DETAILS: A.Y NO. OF TRUCKS INCOME DISCLOSED (RS.) GROSS RECEIPT PER TRUCK NET RECEIPT PER TRUCK 1993-94 38 30,54,000 80,368 54,738 1994-95 38 32,60,000 85,789 64,608 1995-96 38 65,90,000 1,73,421 1,61,431 5 AVERAGE OF 3 YEARS 1,13,193 93,592 FROM ABOVE THE ASSESSING OFFICER NOTICED THAT RECEI PTS OF TRUCKS AS PER ABOVE ORDER COMES TO RS. 113193/-. HOWEVER, HE OBSERVED THAT S INCE SETTLEMENT COMMISSION ORDER FOR ASSESSMENT YEAR 1995-96 AND THE PRESENT YEAR I S 2004-05 AND THERE WAS A GAP OF SEVEN YEARS AND THEREFORE WEAR AND TEAR HAS TO BE A LLOWED FOR EACH OF THE YEAR @ 5%. THEREFORE AVERAGE GROSS RATE PER TRUCK WAS WORKED A T RS. 73575/- AND THE TOTAL INCOME FROM TRUCK OPERATION WAS COMPUTED AS UNDER: IN VIEW OF THE ABOVE DISCUSSION, THE GROSS RECEIPT S FROM 55 TRUCKS WOULD BE AS UNDER: I RS. 30,90,150 FRO M 42 TRUCKS @ RS. 73,575/- PER TRUCK II RS. 6,40,000 FROM 8 TRUCKS @ RS. 80,000 PER TRUC K III RS. 6,00,000 FROM 5 TRUCKS @ RS. 1,20,000 PER T RUCK RS. 43,30,150/- FROM 55 TRUCKS THE ASSESSEE HAS CLAIMED DEDUCTION ON ACCOUNT OF DEPRECIATION HIRE CHARGES AND INTEREST ON LOAN AT RS. 16,51,365/- AS PER DETAIL G IVEN BELOW: LLESS: I DEPRECIATION RS. 13,92,128 II HIRE CHARGES RS. 2,,26,837/- III INTEREST ON LOAN RS. 32,400 RS. 16,51,36 5/-. 7 HE FURTHER OBSERVED THAT THUS TOTAL NET INCOME FR OM TRUCKS COMES TO RS. 2678785/- (I.E. GROSS RECEIPTS OF RS. 4330150/- (-) DEPRECIATION AND HIRE CHARGES ETC. RS. 1651365/-). FROM THIS THE ASSESSING OFFICER RE DUCED INCOME DECLARED BY THE ASSESSEE AMOUNTING TO RS. 638635/- AND THE NET RESU LTING FIGURE CAME TO RS. 2040152/- . FROM THIS HE FURTHER REDUCED A SUM OF RS. 7 LAKH S WHICH HE DETERMINED OUT OF THE INCOME DECLARED BEFORE THE SETTLEMENT COMMISSION ON ACCOUNT OF TRUCK OPERATION AND THUS ADDED A SUM OF RS. 1340150/- TO THE INCOME OF THE ASSESSEE. 8 ON APPEAL IT WAS MAINLY SUBMITTED THAT THE TRIBUN AL IN ASSESSEES OWN CASE ON IDENTICAL FACTS HAS CALCULATED THE TRUCK INCOME @ RS. 22,000/- PER TRUCK AND THEREFORE SAME RATE MAY BE APPLIED. 6 9 THE LD. CIT(A) DECIDED THE ISSUE VIDE PARA 4.4 TO 4.8 AND REDUCED THE INCOME IN RESPECT OF 42 TRUCKS FROM RS. 73,575 TO RS. 73,000/ - PER TRUCK. THE RELEVANT PARAS READ AS UNDER: 4.4 HENCE IT IS PERTINENT TO NOTE THAT FOR ASSESSM ENT YEAR 2001-02 THE ASSESSING OFFICER ASSESSED APPELLANTS INCOME FROM PLYING OF TUCKS @ RS. 93,502/- PER TRUCK FOR A TOTAL OF 51 TRUCKS VIDE ORDER DATED 16.1.2004. AFTER ALLOWING DEPRECI ATION, HIRE CHARGES AND INTEREST ETC. THE NET INCOME WAS WORKED ABOUT AT RS. 56,941/- PER TRUCK. IN APPEAL, THE LD. CIT(A) REDUCED THE NET TRUCK INCOME TO @ RS. 22,000/- PER TRUCK. ON FURTHE R APPEAL BY THE DEPARTMENT, THE HONBLE ITAT VIDE ORDER DATED 30.3.2006 RESTORED THE MATTER BACK TO THE FILE OF MY LD. PREDECESSOR. IN FRESH APPELLATE PROCEEDINGS THE ASSESSEES TRUCK INCOME W AS REASSESSED AFTER TAKING INTO CONSIDERATION PAST HISTORY OF THE CASE, NATURE OF B USINESS AND THE INCOME OFFERED BY ASSESSEE BEFORE SETTLEMENT COMMISSION VIDE ORDER DATED 20.3. 2008 AT THE FOLLOWING RATES: INCOME OF 42 TRUCKS @ RS. 55,000 PER TRUCK RS. 23, 10,000/- INCOME OF 8 TRUCKS @ RS. 1,35,000 PER TRUCK RS. 1, 70,000/- INCOME OF 1 TRUCK @ RS. 1,70,000 PER TRUCK RS. 1, 70,000/- TOTAL INCOMEOF 51 TRUCKS RS. 35,60,000/- THIS GAVE GROSS RECEIPTS OF RS. 69,804/- PER TRUCK. NET INCOME AFTER ALLOWING DEPRECIATION, HIRE CHARGES AND INTEREST ETC. WAS TA KEN AT RS. 33,153/- PER TRUCK. BEING NOT SATISFIED WITH THE ORDER DATED 20.3.2008 OF LD. CIT (A) BOTH APPELLANT AS WELL AS DEPARTMENT HAD FILED FURTHER APPEALS BEFORE THE ITAT AND THE HONB LE ITAT VIDE ITS ORDER DATED 30.6.2009 HAD UPHELD THE ORDER OF THE LD. CIT(A) AND DISMISSED TH E APPEALS FILED BY THE REVENUE AS WELL AS BY THE ASSESSEE. THE HONBE ITAT VIDE ITS ORDER DATED 30.6.2009 WHILE UPHOLDING THE ORDER DATED 20.3.2008 OF LD. CIT(A) INADVERTENTLY MENTIONED THE TRUCK INCOME @ RS. 22,000/- PER TRUCK AS BEING ESTIMATED BY THE LD. CIT(A). THE DEPARTMENT HAS ALREADY FILED A MISCELLANEOUS APPLICATION ON 23.11.2009 BEFORE THE HONBLE ITAT F OR RECTIFICATION OF THE SAID MISTAKE. 4.6 BEFORE ME, THE LD. COUNSEL FOR THE ASSESSEE HAS STATED THAT IT WOULD BE PERTINENT TO PERUSE THE ITATS ORDER DATED 30.6.2009 AS FOLLOWS: HOWEVER, SINCE THE MAJORITY OF TRUCKS ARE OF OLD M ODEL, WE ARE OF THE VIEW THAT THE LD. FIRST APPELLATE AUTHORITY IS QUITE JUSTIFIED IN ADO PTING THE INCOME OF RS. 22,000/- PER TRUCK AS WEAR AND TEAR AND OTHER EXPENSES ARE MORE. IT IS NOT THE CASE THAT THE LD. FIRST APPELLATE AUTHORITY HAS BLINDLY ADOPTED THE RATE OF RS. 22,000/- RATHER THE CONCLUSION IS BASED UPON VARIOUS FACTS AND CIRCUMSTANCES . IN VIEW OF THESE FACTS, WE HAVE NOT FOUND ANY INFIRMITY IN THE IMPUGNED ORDER, THEREFORE THE APPEAL OF THE ASSESSEE IS HAVING NO MERIT. SINCE THE IMPUGNED ORDER HAS BEEN UPHELD, T HEREFORE THE APPEAL OF THE REVENUE IS AUTOMATICALLY DISPOSED OFF I.E. DISMISSED. 4.7 IN ITATS ORDER IT IS QUITE CLEAR THAT THE DIRE CTIONS FOR ADOPTING THE GROSS RECEIPTS OF RS. 22,000/- FOR THE OLD TRUCKS IS IN DIRECT REFERENCE TO MY PREDECESSORS ORDER NO. 90/IT/CIT(A)/PTA/06-07 DATED 20.3.2008 WHEREIN GROS S RECEIPTS HAD BEEN ESTIMATED AT RS. 55,000/- PER TRUCK FOR THE OLD 42 TRUCKS. THE HON BLE ITAT HAD REFERRED TO THAT THEY DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER MEANING THE OR DER OF MY PREDECESSOR DATED 20.3.2008 AND NOT THE EARLIER ORDER OF 30.3.2006. ALL THE OTHER GROUNDS ARE COVERED BY THE SETTLEMENT COMMISSION. 4.8 ON CONSIDERATION OF THE FACTS OF THE CASE A ND CONTENTIONS OF LD. COUNSEL FOR THE ASSESSEE IT WOULD BE FAIR IF THE GROSS RECEIPTS ARE TAKEN AT RS. 73,000/- PER TRUCK IN RESPECT OF 42 TRUCKS AGAINST A RATE OF RS. 73,575/- PER TRUCK EST IMATED BY THE ASSESSING OFFICER. TOTAL RECEIPTS WOULD WORK OUT TO RS. 43,06,000/- I.E. (73,000 X 42 ) + (80,000 X 8) + (1,20,000 X 5). DEPRECIATION, HIRE CHARGES AND INTEREST NEED TO BE DEDUCTED. ASSESSING OFFICER IS DIRECTED TO WORK OUT THE RECEIPTS ACCORDINGLY. 7 10 BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT HE IS NOT DISPUTING THE REJECTION OF BOOKS BUT EVEN IF THE BOOKS OF ACC OUNT ARE REJECTED THEN THE PROFIT HAS TO BE ESTIMATED ON A FAIR AND REASONABLE BASIS AND IN THIS REGARD HE PLACED RELIANCE IN THE CASE OF STATE OF ORISSA V. MAHARAJA SHRI B.P. SINGH DEO, 76 ITR 690 (S.C) AND CIT V. RANICHERRA TEA CO. LTD., 207 ITR 979 (CAL). HE FUR THER SUBMITTED THAT IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2001-02 AND 2004-05 T HE TRIBUNAL HAS ESTIMATED THE INCOME FROM EACH TRUCK AT RS. 22,000 AND THEREFORE SAME MAY BE FOLLOWED. IN THIS REGARD HE REFERRED TO THE ORIGINAL ASSESSMENT ORDER , APPELLATE ORDER AND ORDERS OF THE TRIBUNAL AND TRACED THE HISTORY OF THE CASE FOR EAR LIER YEARS. HE CONTENDED THAT THESE ORDERS HAVE BEEN CONFIRMED BY THE HON'BLE HIGH COUR T OF PUNJAB & HARYANA AND IN THIS REGARD HE REFERRED TO THE ORDER OF HON'BLE HIGH COU RT PLACED AT PAGE 76 TO 81 OF THE PAPER BOOK. THE LD. COUNSEL FOR THE ASSESSEE FAIRL Y ADMITTED THAT THE DISPUTE IS MAINLY IN RESPECT OF 42 TRUCKS BECAUSE THE RECEIPTS FOR OT HER YEARS HAVE NOT BEEN CHANGED BY THE ASSESSING OFFICER. 11 HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS FURTHER ADDED A SUM OF RS. 8 LAKHS BEING SURRENDERED INCOME BEFORE THE SETTLEMEN T COMMISSION AND THEREFORE SAME SHOULD BE SET OFF AGAINST THE ESTIMATION OF TR UCK RECEIPTS. 12 ON THE OTHER HAND, THE LD. D.R FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND THE LD. CIT(A). HE ALSO SUBMITTED THAT IN THIS CASE IT IS PERTINENT TO NOTE THAT ASSESSEES IS NOT MAINTAININ G PROPER BOOKS OF ACCOUNT FOR LAST SO MANY YEARS AND IS TRYING TO GET AWAY WITH THE ESTIM ATION. SIMULTANEOUSLY THE ASSESSEE IS ALSO FILING DECLARATION BEFORE THE SETTLEMENT CO MMISSION. IT HAS TO BE NOTED THAT IN THE EARLIER YEAR SETTLEMENT COMMISSION VIDE ORDER D ATED 2.9.2002 FOR ASSESSMENT YEAR 2003-04 TO 2005-06 HAD ESTIMATED THE RECEIPTS AT RS . 113193/- AND THEREFORE RECEIPTS SHOULD BE ESTIMATED AT HIGHER LEVEL BECAUSE OF THE INFLATION AND GROWTH IN THE ECONOMY. 8 13 IN THE REJOINDER THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT RECEIPTS HAVE DECREASED OVER A PERIOD OF TIME WHEN THE TRUCKS BEC OME OLDER AND THEREFORE THERE IS NO SCOPE FOR INCREASING THE RECEIPTS. 14 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND FIND THAT THE ASSESSEE IS NOT MAINTAINING PROPER BOOKS OF ACCOUNT AND WHATEVE R BOOKS WERE PREPARED, WERE NOT PRODUCED BEFORE THE ASSESSING OFFICER FOR LAST SO M ANY YEARS. WE FAIL TO UNDERSTAND WHEN THE ASSESSEE IS HAVING 55 TRUCKS AND ALL FAMIL Y MEMBERS TOGETHER ARE OWNING ABOUT 200 TRUCKS THEN WHAT IS PREVENTING THE ASSESS EE FOR MAINTAINING PROPER BOOKS OF ACCOUNT. ONLY CONCLUSION WHICH WE CAN ARRIVED IS T HAT THE ASSESSEE IS TRYING TO GET AWAY WITH SOME ESTIMATION. THE PROVISIONS OF SECTI ON 44AE WHICH DEALS WITH PRESUMPTIVE PROFIT HAVE BEEN INSERTED FOR THE BENEF IT OF SMALL ASSESSES WHO ARE OWNING LESS THAN 10 TRUCKS AND THEREFORE NATURALLY THE BE NEFIT OF THESE PROVISIONS CANNOT BE EXTENDED TO THE ASSESSEE. IT IS FURTHER INTERESTIN G TO NOTE THAT THE ASSESSEE HAS BEEN FILING APPLICATION BEFORE THE SETTLEMENT COMMISSION REGULARLY FOR VARIOUS YEARS AND IT TRANSPIRED DURING THE HEARING THAT SUCH APPLICATION S WERE FILED EVEN FOR ASSESSMENT YEARS 2003-04 TO 2005-06. CERTAIN SURRENDERS WERE MADE AND ULTIMATELY SETTLEMENT COMMISSION ASSESSED THE RECEIPTS AT RS. 113193 VIDE ORDER DATED 2.9.2002 FOR EARLIER YEAR. HOWEVER, APPLICATION FOR THE PRESENT YEAR WA S NOT ALLOWED BECAUSE OF SOME AMENDMENTS IN THE LAW AND THEREFORE ASSESSEE HAS IT SELF DECLARED A SUM OF RS. 8 LAKHS AS ADDITIONAL INCOME. 15 IN THE BACKGROUND OF ABOVE HISTORY OF THE CASE W E HAVE CAREFULLY PERUSED THE ORDERS OF HON'BLE HIGH COURT OF PUNJAB & HARYANA I N CASE OF CIT V HARJIT SINGH, ITA NO. 703 OF 2009 VIDE ORDER DATED 22.1.2010 (COPY OF WHICH HA BEEN FILED AT PAGE 76 TO 81 OF THE PAPER BOOK). FOLLOWING FACTS HAVE BEEN N OTED BY THE HON'BLE HIGH COURT AT PAGE 2 & 3 OF THE ORDER: 9 THE ASSESSEE HAD FILED HIS RETURN IN RESPECT OF AS SESSMENT YEAR 2001-02. ON SCRUTINY ASSESSMENT WAS COMPLETED ON 16.1.2004 BY THE ASSESS ING OFFICER U/S 144 OF THE ACT. THE INCOME OF THE ASSESSEE-RESPONDENT WAS ESTIMATED AT RS. 87655/- BY MAKING THE ORDER DATED 2.9.2002 PASSED BY THE SETTLEMENT COMMISSION FOR TH E ASSESSMENT YEAR 1993-04 TO 1995-96. THE ASSESSING OFFICER HAD ALSO ALLOWED DEPRECIATION , HIRE CHARGES AND INTEREST OUT OF THE SAME. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND VID E HIS ORDER DATED 1.11.2004, HE ESTIMATED THE INCOME PER TRUCK AT RS. 22,000. FEELING AGGRIE VED, THE REVENUE FILED FURTHER APPEAL AND THE TRIBUNAL VIDE ITS ORDER DATED 30.3.2006, SET ASIDE THE ORDER OF THE ASSESSING OFFICER AND RESTORED THE ISSUE ON THE FILE OF THE LD. CIT(A) FOR PASSING A SPEAKING ORDER. ON REMAND, THE LD. CIT(A) VIDE ITS ORDER DATED 20.3.2008 ASSESSED THE INCOME PER TRUCK AT RS. 45,000. BOTH ASSESSEE AS WELL AS THE REVENUE CHALLENGED THE ORDER OF THE LD. CIT(A) BEFORE THE TRIBUNAL AGAINST THE ORDER DATED 20.3.2008. THE TRIBUNAL DISMISSED BOTH THE S ETS OF APPEALS BY OBSERVING THAT IN THE ABSENCE OF BOOKS OF ACCOUNT, THERE CANNOT BE ANY C UT AND DRY FORMULA TO ESTIMATE THE INCOME PER TRUCK. ACCORDINGLY THE ORDER PASSED BY THE LD . CIT(A) WAS UPHELD. FROM ABOVE IT BECOMES CLEAR THAT THE LD. CIT(A) VID E ORDER DATED 20.3.2008 ASSESSED THE INCOME PER TRUCK AT RS. 45,000. THER EFORE THERE IS NO FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE TRIBUNAL ASSESSED THE INCOME AT RS. 22,000 PER TRUCK WHICH HAS BEEN CONFIRMED BY TH E HON'BLE HIGH COURT ALSO. HON'BLE HIGH COURT WAS CONCERNED WITH THE CASE WHERE THE I NCOME HAD BEEN ASSESSED AT RS. 45,000 PER TRUCK. THOUGH THIS IS ONLY THE CASE WHIC H WENT TO HON'BLE HIGH COURT AND IT PERTAINS TO SHRI HARJIT SINGH WHO IS THE BROTHER OF THE ASSESSEE. WHEN THIS FACT WAS POINTED TO THE LD. COUNSEL FOR THE ASSESSEE HE ADMI TTED THAT NO APPEALS HAVE BEEN FILED IN CASE OF THE ASSESSEE BEFORE THE HON'BLE HIGH COU RT . THE FINDINGS OF THE LD. CIT(A) HAS ALSO BEEN NOTED BY THE HON'BLE HIGH COURT AT P AGE 4 & 5 WHICH ARE AS UNDER: 10. AFTER CONSIDERING THE FACTS OF THE CASE, AND FURTHER THAT ASSESSEE HAS NOT GIVEN ANY BIFURCATION OF HEAD WISE RECEIPTS AS DECLARED BEFOR E THE HONBLE COMMISSIONS IT WOULD BE FAIR IF THE RECEIPTS ARE TAKEN AT RS. 45,000/- EACH IN RESP ECT OF 50 TRUCKS. HOWEVER, IN RESPECT OF 2 TRUCKS THE RECEIPTS ARE TAKEN BY THE ASSESSEE HIMSE LF AT RS. 1,50,000/- EACH. THUS THE TOTAL RECEIPTS WOULD WORKOUT TO RS. 25,50,000/- I.E. {45, 000 X 50) + (1,50,000 X 2 ). HOWEVER DEPRECIATION AND INTEREST INCLUDING HIRE CHARGES HA VE TO BE ALLOWED. THE A.O. IS DIRECTED TO WORK OUT THE TOTAL RECEIPTS ACCORDINGLY. 11. IT MAY BE SUBMITTED THAT TWO OTHER FAMILY MEMBE RS OF THE ASSESSEE NAMELY S/SH. KESAR SINGH AND FATEH SINGH WERE ALSO IN THE SAME BUSINES S I.E. THE BUSINESS OF PLYING OF TRUCKS / TRANSPORTATION. THE AVERAGE RECEIPTS IN RESPECT OF 42 TRUCKS IN THE CASE OF SH. KESAR SINGH AND 34 TRUCK IN THE NAME OF SH. FATEH SINGH HAS BEEN ADOPT ED @ 55,000/- EACH. HOWEVER FROM THE FIGURE OF DEPRECIATION CLAIMED BY THESE TWO PERSONS (RS. 13,29,244/- IN THE CASE OF KESAR SINGH & RS. 6,90,825/- IN THE CASE OF FATEH SINGH) IT APPEA RS THAT THE TRUCKS OWNED BY THESE TWO FAMILY MEMBERS OF THE ASSESSEE THAT THE TRUCKS OWNED BY TH ESE TWO FAMILY MEMBERS OF THE ASSESSEE WERE COMPARATIVELY OF LOWER AGE AS IN THE CASE OF T HE ASSESSEE AS THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS. 3,99,240/- IN RESPECT OF TOTAL 52 TRUCKS. THIS SHOWS THAT THE VEHICLES OWNED BY THE ASSESSEE WERE OLD AS COMPARED TO THE VEHICLES O WNED BY THE OTHER TWO FAMILY MEMBERS OF THE ASSESSEE NAMED ABOVE. AND THIS IS A BASIS CONSI DERED FOR ADOPTING THE AVERAGE TRUCK RECEIPTS @ RS. 45,000/- PER TRUCK IN RESPECT OF 50 TRUCK IN THE PRESENT CASE. 10 16 ULTIMATELY HON'BLE HIGH COURT ADJUDICATED THE I SSUE AS UNDER: THE ONLY ARGUMENT RAISED BY LEARNED COUNSEL FOR THE REVENUE IS THAT THE RATE OF INCOME PER TRUCK WORKED OUT BY THE SETTLEMENT COMMISSION SHOULD HAVE BEEN MADE THE BASIS AS WAS DONE BY THE ASSESSING OFFICER. THE AFORESAID ARGUMENT OVERLOOK THE FACT THAT THE ASSESSEE USED TO DECLARE ADDITIONAL INCOME FROM ALL OTHER SOURCES APART FROM INCOME FROM MAIN SOURCE I.E. PLYING OF TRUCKS. IN THAT REGARD, REFERENCE HAS BEEN MADE BY THE CIT( A) TO THE APPLICATION FILED BY THE ASSESSEE WHICH SHOWS THAT INCOME FROM THREE OTHER SOURCES AL SO USED TO BE CLAIMED NAMELY INCOME FROM CONSULTATION SERVICES TO THE OTHER TRANSPORTERS / T RUCK OWNERS, INCOME FROM OTHER TRANSPORTERS FOR THE HELP RENDERED TO PROCURE ROUTE PERMITS AND INCO ME FROM THE HELP RENDERED TO OTHER TRANSPORTERS FOR RUNNING TRANSPORTATION BUSINESS. I T WAS ON THE BASIS OF THE AFORESAID FACTORS THAT THE TOTAL INCOME WORKED OUT BY THE SETTLEMENT COMMI SSION WAS NOT TAKEN INTO ACCOUNT AND, THEREFORE, THE ARGUMENT RAISED BY THE REVENUE IS DE VOID OF MERIT. IN A CASE OF THIS NATURE, THERE CANNOT BE ANY LEGAL FORMULA FOR WORKING OUT THE INC OME AND THE TRIBUNAL HAS TAKEN CORRECT VIEW BY ADOPTING THE OPINION EXPRESSED BY THE CIT(A). FROM ABOVE IT IS CLEAR THAT THE HON'BLE HIGH COURT HAS CONFIRMED THE INCOME OF PER TRUCK AT RS. 45,000 PER YEAR. THIS ORDER PERTAINS TO ASSESSMENT YEAR 2001-02 WHEREAS THE APPEALS BEFORE US ARE FOR ASSESSMENT YEARS 2003 -04 AND 2005-06. IT WAS POINTED OUT THAT NO DISPUTE AROSE IN THE INTERVENING YEAR B ECAUSE RETURN FILED BY THE ASSESSEE WERE PROCESSED U/S 143(1) WITHOUT ANY SCRUTINY. TH EREFORE IN OUR OPINION, IF THE INCOME OF RS. 55,000 PER TRUCK IN ASSESSMENT YEAR 2003-04 AND RS. 60,000 IN ASSESSMENT YEAR 2005-06 IS ESTIMATED THEN IT WOULD BE REASONA BLE AND THE SAME WOULD MEET THE ENDS OF JUSTICE. 17 AS FAR AS THE ISSUE REGARDING SURRENDERED INCOME IS CONCERNED, THE ASSESSING OFFICER HAS VERY FAIRLY ESTIMATED AND BIFURCATED TH E RECEIPTS FROM TRUCKS AND RECEIPTS ON ACCOUNT OF OTHER YEARS LIKE PROVISION OF FINANCIAL HELP, ROUTE PERMIT ETC. AS MENTIONED IN PARA 12 OF HIS ORDER. HE HAS ESTIMATED ONLY RS. 1 LAKH FROM OTHER RECEIPTS AND RS. 7 LAKHS FROM TRUCK RECEIPTS WHICH HAS BEEN REDUCED FR OM ESTIMATED RECEIPTS. IN OUR OPINION WHEN SURRENDERED INCOME HAS BEEN SEPARATELY ADDED THEN RELIEF FOR WHOLE OF RS. 8 LAKHS SHOULD BE GIVEN. ACCORDINGLY WE SET A SIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO ESTIMATE THE RECEIP TS AS DIRECTED BY US IN PARA 16 OF THIS ORDER IN RESPECT OF 42 TRUCKS. HE SHOULD ALSO REDU CE THE RECEIPTS BY RS. 8 LAKHS ON ACCOUNT OF SURRENDERED INCOME INSTEAD OF RS. 7 LAK HS WHICH HE HAS REDUCED. AS FAR AS 11 RECEIPTS FROM OTHER TRUCKS ARE CONCERNED, NO INTERF ERENCE IS REQUIRED BECAUSE SAME WAS RETURNED BY THE ASSESSEE AS SUCH. 18 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 935/CHD/2011 IS PARTLY ALLOWED. ITA NO. 936/CHD/2011 19 THE ISSUES RAISED IN THIS APPEAL ARE IDENTICAL W ITH THE ISSUES ADJUDICATED BY US IN ABOVE APPEAL EXCEPT THAT RECEIPTS HAVE BEEN ESTIMAT ED BY US FOR THIS YEAR AT RS. 60,000 PER TRUCK FOR OLDER TRUCKS VIDE PARA 16. HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN BIFURCATION IN THIS YEAR AND ESTIMATED THE RECEIPTS AT RS. 62,256 FOR ALL THE TRUCKS. THESE RECEIPTS ARE INCLUSIVE OF RECEIPTS FROM NEW TRUCKS WHICH WERE AT RS. 80,000 FOR 8 TRUCKS AND RS. 1,20,000 FOR 5 TRUCKS IN ASSESSMENT YEAR 2 003-04. THIS ESTIMATE HAS BEEN REDUCED TO RS. 62,000 BY THE LD. CIT(A). CONSIDERI NG THIS FACT WE ARE OF THE OPINION THAT NO FURTHER INTERFERENCE IS REQUIRED AND ESTIM ATION OF RECEIPTS AT RS. 62,000 WHICH IS MORE THAT REASONABLE AND ACCORDINGLY WE DECLINE TO INTERFERE IN THE ORDER OF THE LD. CIT(A) IN THIS RESPECT. HOWEVER, IN THIS YEAR ALSO THE ASSESSING OFFICER HAS GIVEN CREDIT ONLY FOR RS. 17,50,000 OUT OF SURRENDERED INCOME BY PARTLY ALLOCATING SURRENDERED INCOME THROUGH OTHER RECEIPTS. AS ALREADY OBSERVED BY US IN ASSESSMENT YEAR 2003-04 IN ITA NO. 935/CHD/2011, ONCE THE SURRENDERED INCOM E HAS BEEN SEPARATELY ADDED THEN RELIEF FOR WHOLE AMOUNT OF RS. 20 LAKHS SHOULD BE GIVEN. THEREFORE WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OF FICER TO ESTIMATE THE RECEIPTS OF ALL THE TRUCKS AT RS. 62,000 PER TRUCK AND REDUCE SUM OF RS. 20 LAKHS BEFORE COMPUTING INCOME FROM TRUCKS. 20 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 936/CHD/2011 IS PARTLY ALLOWED. ITA NO. 931/.CHD/2011 12 21 IN THIS CASE ALSO THE ISSUES ARE COMMON AND AS D ISCUSSED BY US ABOVE WHILE ADJUDICATING ITA NO. 935/CHD/2011 IN PARA 16, THE R ECEIPTS ARE ESTIMATED AT RS. 55,000/- FOR 34 TRUCKS AND FOR BALANCE THREE TRUCKS @ RS. 94,000 AS RETURNED BY THE ASSESSEE. FURTHER THE ASSESSING OFFICER SHOULD GIV E CREDIT OF FULL RS. 8 LAKHS OF THE SURRENDERED INCOME WHICH HAS BEEN SEPARATELY ADDED AND CREDIT HAS BEEN GIVEN ONLY FOR RS. 7 LAKHS. THUS THIS APPEAL IS PARTLY ALLOWE D. 22 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 931/CHD/2011 IS PARTLY ALLOWED. ITA NO. 932/CHD/2011 23 IN THIS CASE THE ASSESSING OFFICER HAS HIMSELF E STIMATED RECEIPTS AT RS. 56048 FOR 35 TRUCKS AND RS. 55,000 FOR 4 TRUCKS. THE LD. CIT (A) HAS RESTRICTED THIS ESTIMATE TO RS. 55,000. WE HAVE ESTIMATED THE RECEIPTS FOR ASSESSM ENT YEAR 2005-06 AT RS. 60,000 BUT SINCE THE TRIBUNAL HAS NO POWER OF ENHANCEMENT, THEREFORE A SUM OF RS. 55,000 MADE BY THE LD. CIT(A) IS CONFIRMED. HERE AGAIN THE ASSESSING OFFICER HAS GIVEN CREDIT OF RS. 8,50,000 OUT OF SURRENDERED INCOME OF RS. 10 LAKHS FROM THE ESTIMATE MADE BY HIM FOR TRUCK RECEIPTS. AS OBSERVED EARLIER ONCE S URRENDERED INCOME HAS BEEN ADDED SEPARATELY THEN FULL AMOUNT SHOULD HAVE BEEN ALLOWE D AS CREDIT OUT OF THE TRUCK RECEIPTS. ACCORDINGLY THE ASSESSING OFFICER IS DIRECTED TO REDUCE A SUM OF RS. 10 LAKHS OUT OF ESTIMATED TRUCK RECEIPTS. ACCORDINGLY THIS APPEAL IS PARTLY ALLOWED. 24 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 932/CHD/2011 IS PARTLY ALLOWED. ITA NO. 933/CHD/2011 25 FOLLOWING OUR ORDER IN ITA NO. 935/CHD/2011 THE INCOME FROM 36 TRUCKS, 14 TRUCKS AND 2 TRUCKS IS ESTIMATED AT RS. 55,000 PER TRUCK AND INCOME FROM LAST TWO TRUCKS IS ESTIMATED AT RS. 60,000 BECAUSE THE ASSESSEE HAS HIMSELF ESTIMATED AT RS. 60,000. IN THIS CASE ALSO THE ASSESSING OFFICER HAS ALLOWED A SUM OF RS. 14 LAKHS OUT OF 13 SURRENDERED INCOME OF RS. 15 LAKHS OUT OF ESTIMATED TRUCK RECEIPTS. AS OBSERVED EARLIER ONCE THE SURRENDERED INCOME HAS BEEN SEPARATELY ADD ED THEN FULL AMOUNT OF RS. 15 LAKHS SHOULD BE REDUCED FROM THE ESTIMATED TRUCK RE CEIPTS. THEREFORE THIS APPEAL IS PARTLY ALLOWED. 26 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 933/CHD/2011 IS PARTLY ALLOWED. ITA NO. 934/CHD/2011 27 IN THIS CASE THE ASSESSING OFFICER HAS HIMSELF E STIMATED THE RECEIPTS AT RS. 55,749 PER TRUCK WHICH HAS BEEN REDUCED TO RS. 55,0 00 BY THE LD. CIT(A). THEREFORE FOLLOWING OUR ORDER IN ITA NO. 935/CHD/2011 IN PARA 16, WE CONFIRM THE ESTIMATE. FURTHER HERE ALSO THE ASSESSING OFFICER HAS ALLOWED RELIEF OF RS. 19 LAKHS OUT OF SURRENDERED INCOME OF RS. 20 LAKHS. AS OBSERVED EA RLIER ONCE SEPARATE ADDITION HAS BEEN MADE FOR SURRENDERED INCOME OF RS. 20 LAKHS TH EN FULL RELIEF SHOULD HAVE BEEN ALLOWED OUT OF ESTIMATED RECEIPTS AND ACCORDINGLY THE ASSESSING OFFICER IS DIRECTED TO ALLOW RELIEF OF RS. 20 LAKHS. THUS THIS APPEAL IS PARTLY ALLOWED. 28 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 934/CHD/2011 IS PARTLY ALLOWED. ITA NO. 218/CHD/2014 29 IN THIS CASE RECEIPTS WERE RETURNED BY THE ASSES SEE AS UNDER: I RS. 6,25,000 FROM 25 TRUCKS @ RS. 25,000 PER TRUC K II RS. 4,68,000 FROM 13 TRUCKS @ RS. 36,000 PER TRU CK III RS. 2,40,000 FROM 4 TRUCKS @ RS. 60,000 PER TRU CK IV RS. 24,00,000 FROM 20 TRUCKS @ 1,20,000 PER TRUC K V RS. 2,72,000 FROM 2 TRUCKS @ 1,36,000 PER TRUCK VI RS. 2,08,000 FROM 2 TRUCKS @ 1,04,000 PER TRUCK VII RS. 1,56,000 FROM 2 TRUCKS @ 78,000 PER TRUCK VIII RS. 48,000 FROM 2 TRUCKS @ 24,000 PER TRUCK 14 AFTER SIMILAR REASONING AS IN CASE OF SHRI KESAR SI NGH IN ITA NO. 935/CHD/2011 THE ASSESSING OFFICER FINALLY COMPUTED THE INCOME AS UN DER: I RS. 37,95,000 FROM 46 TRUCKS @ RS. 82,500 PER TRU CK II RS. 24,00,000 FROM 20 TRUCKS @ RS. 1,20,000 PER TRUCK III RS. 2,72,000 FROM 2 TRUCKS @ RS. 1,36,000 PER T RUCK IV RS. 2,08,000 FROM 2 TRUCKS @ RS. 1,04,000 PER TR UCK TOTAL: RS. 66,75,000 FROM 70 TRUCKS CONSIDERING THE PARITY AND FURTHER CONSIDERING THE FACT THAT NOW WE ARE IN ASSESSMENT YEAR 2009-10, WE ESTIMATE THE RECEIPTS FROM FIRST 46 TRUCKS AT RS. 70,000 PER YEAR. THE RECEIPTS FROM OTHER 20 TRUCKS WHICH ARE NEW AND ESTIMATED BY THE ASSESSEE AT RS. 1,20,000 PER TRUCK AND OTHER TWO TR UCKS AT RS. 1,36,000, ANOTHER 2 TRUCKS AT RS. 1,04,000 AND ANOTHER TWO TRUCKS @ RS. 78,000 SHOULD BE ESTIMATED AT THE RETURNED FIGURE BECAUSE THE ASSESSEE HAS HIMSELF ES TIMATED THE SAME AS STATED IN THIS PARA. THEREFORE THIS APPEAL IS PARTLY ALLOWED. 30 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 218/CHD/2014 IS PARTLY ALLOWED. 31 IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE DISPOSED OFF AS UNDER: S NO ITA NO. RESULT 1 935/CHD/2011 PARTLY ALLOWED 2 936/CHD/2011 -DO- 3 931/CHD/2011 -DO- 4 932/CHD/2011 -DO- 5 933/CHD/2011 -DO- 6 934/CHD/2011 -DO- 7 218/CHD/2014 -DO- ORDER PRONOUNCED IN THE OPEN COURT ON 10.9.201 4 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10.9.2014 SURESH COPY TO: THE APPELLANT/ THE RESPONDENT/ THE CIT/ TH E CIT (A)/ THE DR 15