M/s Gupta Global Exim Pvt. Ltd.,, GANDHIDHAM v. The Assistant Commissioner of Income Tax, Circle,, GANDHIDHAM

ITA 1109/RJT/2009 | 1998-1999
Pronouncement Date: 25-02-2011 | Result: Dismissed

Appeal Details

RSA Number 110924914 RSA 2009
Assessee PAN AAACG7805L
Bench Rajkot
Appeal Number ITA 1109/RJT/2009
Duration Of Justice 1 year(s) 3 month(s) 5 day(s)
Appellant M/s Gupta Global Exim Pvt. Ltd.,, GANDHIDHAM
Respondent The Assistant Commissioner of Income Tax, Circle,, GANDHIDHAM
Appeal Type Income Tax Appeal
Pronouncement Date 25-02-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 25-02-2011
Date Of Final Hearing 30-12-2010
Next Hearing Date 30-12-2010
Assessment Year 1998-1999
Appeal Filed On 20-11-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.1109/RJT/2009 (ASSESSMENT YEAR 1998-99) M/S GUPTA GLOBAL EXIM PVT LTD VS ACIT GANDHIDHAM PLOT NO.244/1 NH NO.8A GANDHIDHAM PAN : AAACG7805L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MP SARDA RESPONDENT BY : SHRI AVINASH KUMAR O R D E R PER N.R.S. GANESAN JM BEING AGGRIEVED BY THE ORDER OF THE CIT(A) DATED 2 7-10-2009 FOR THE ASSESSMENT YEAR 1998-99 THE ASSESSEE FILED THE APPE AL BEFORE THIS TRIBUNAL. 2. SHRI M.P. SARDA THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THIS APPEAL HAS COME BEFORE THE TRIBUNAL FOR T HE SECOND TIME. DURING THE COURSE OF FIRST ROUND THE MATTER REACHED UPTO THE APEX COURT AND THE APEX COURT REMANDED BACK THE MATTER TO THE FILE OF THE CIT(A) TO FIND OUT WHETHER THE ASSESSEE WAS IN THE BUSINESS OF HIRING THE TRUCKS I N ADDITION TO THE BUSINESS OF TRADING IN TIMBER. CONSEQUENT TO THE ORDER OF THE APEX COURT THE CIT(A) CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER AND ON THE BASIS OF THE REMAND REPORT THE CIT(A) FOUND THAT THE ASSESSEE WAS USIN G THE VEHICLE FOR DELIVERY OF THE TIMBERS TO THE PURCHASERS. ACCORDING TO THE LE ARNED REPRESENTATIVE THE CIT(A) FOUND THAT THE BUSINESS OF TRANSPORT IS ONLY ANCILLARY TO THE MAIN BUSINESS OF TIMBER TRADING. THE LEARNED REPRESENTATIVE FURT HER SUBMITTED THAT WHETHER IT IS MAIN BUSINESS OR ANCILLARY BUSINESS WHEN THE ASSES SEE USES THE VEHICLE FOR ITS BUSINESS IT IS ENTITLED FOR HIGHER RATE OF DEPRECIA TION. REFERRING TO THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2000-01 THE COPY OF WHIC H IS AVAILABLE AT PAGE 203 OF ITA NO.1109/RJT/2009 2 THE PAPER BOOK THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HIMSELF GRANTED DEPRECIATION @40% FOR THE ASSESSMENT YEAR 2000-01. 3. ON THE CONTRARY SHRI AVINASH KUMAR THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSEE HAS NOT USED THE VEHICLE FOR TRANSPORTATION BUSINESS ON HIRE. THEREFORE AS HEL D BY THE APEX COURT THE ASSESSEE IS NOT ENTITLED FOR THE HIGHER RATE OF DEP RECIATION. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE HA VE ALSO CAREFULLY GONE THROUGH THE JUDGMENT OF THE APEX COURT. THE APEX C OURT AFTER CONSIDERING THE ORDERS OF THE LOWER AUTHORITIES AND THE FINDINGS RE CORDED BY THE HIGH COURT FOUND THAT IT IS NECESSARY TO FIND OUT WHETHER THE ASSESS EE IS IN THE BUSINESS OF HIRING OF TRUCKS IN ADDITION TO THE BUSINESS OF TRADING IN TI MBER. TO FIND OUT WHETHER THE ASSESSEE WAS HIRING OUT THE TRUCKS THE APEX COURT R EMANDED BACK THE MATTER TO THE FILE OF THE CIT(A). CONSEQUENT TO THE ORDER OF THE HIGH COURT THE CIT(A) EXAMINED THE ISSUE ELABORATELY AFTER GETTING THE RE MAND REPORT FROM THE ASSESSING OFFICER. THE CIT(A) FOUND THAT THE ASSES SEES MAIN BUSINESS IS TRADING IN TIMBER AND WHENEVER THE PURCHASER DID NOT HAVE A NY VEHICLE OR MEANS OF TRANSPORT THE ASSESSEE USED TO TRANSPORT THE GOODS IN HIS OWN VEHICLE. THEREFORE IT IS OBVIOUS THAT THE ASSESSEE USES THE VEHICLE IN HIS BUSINESS FOR TRANSPORTATION OF THE MATERIAL THAT WAS SOLD BY THE ASSESSEE. THE SUPREME COURT SPECIFICALLY DIRECTED THE CIT(A) TO FIND OUT WHETHE R THE ASSESSEE WAS HIRING OUT THE TRUCKS IN ADDITION TO THE BUSINESS OF TRADING I N TIMBER. THE MAIN CONTENTION OF THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND BEFOR E THIS TRIBUNAL IS THAT THE TRANSPORT CHARGES ARE SHOWN SEPARATELY. REFERRING TO THE TRANSPORT CHARGES SHOWN SEPARATELY THE APEX COURT SPECIFICALLY FOUND THAT MERELY BECAUSE RS.12 50 639 WAS TREATED AS TOTAL BUSINESS INCOME W HICH IS NOT DETERMINATIVE OF THE TESTS VIZ. WHETHER THE TRUCK WAS USED IN TRANS PORT BUSINESS AS CLAIMED BY THE ASSESSEE. NO MATERIAL IS AVAILABLE ON RECORD TO SH OW THAT THE ASSESSEE WAS HIRING OUT VEHICLE APART FROM THE BUSINESS OF SALE OF TIMBER. THE TERM HIRING OR ITA NO.1109/RJT/2009 3 HIRE IS NOT DEFINED IN THE INCOME-TAX ACT. THE CO MMON MEANING OF HIRE IS A CONTRACT BY WHICH ONE GIVES TO ANOTHER TEMPORARY PO SSESSION AND USE OF THE MACHINERY OR PROPERTY FOR PAYMENT OF COMPENSATION A ND THE LATTER AAGREES TO RETURN THE PROPERTY / MACHINERY AFTER EXPIRY OF AGR EEMENT PERIOD. IN THIS CASE ADMITTEDLY THE TRUCK WAS NOT HANDED OVER FOR USE OF ANOTHER ON PAYMENT OF ANY CHARGES. ADMITTEDLY THE ASSESSEE TRANSPORTED THE G OODS TO THE PURCHASERS. THEREFORE IT MAY NOT BE CORRECT TO SAY THAT THE AS SESSEE HAS HIRED OUT THE TRUCKS. THIS VIEW OF OURS IS FORTIFIED BY THE JUDGMENT OF M ADRAS HIGH COURT IN CIT VS POMPUHAR SHIPPING CRPORATIN LTD (2006) 282 ITR 3 (M AD). NO DOUBT THE ASSESSEE HAS SHOWN THE INCOME OF RS.12 50 639 AS PA RT OF THE TOTAL INCOME. AS HELD BY THE APEX COURT THIS ITSELF IS NOT DETERMINA TIVE FACTOR TO FIND OUT WHETHER THE ASSESSEE WAS HIRING OUT THE TRUCKS OR NOT. THE ASSESSEE HAS TO PRODUCE NECESSARY MATERIAL TO ESTABLISH THAT IT WAS HIRING OUT THE VEHICLE APART FROM TRADING IN TIMBER. MAINLY BECAUSE THE TIMBERS WERE TRANSPORTED TO SOME OF THE PURCHASERS IN THE ASSESSEES OWN VEHICLE THAT ALONE CANNOT BE A FACTOR TO COME TO THE CONCLUSION THAT THE ASSESSEE IS HIRING OUT T HE TRUCKS. IN THE ABSENCE OF ANY MATERIAL TO ESTABLISH THAT THE ASSESSEE IS HIRI NG OUT THE VEHICLE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHOR ITY. ACCORDINGLY THE SAME IS CONFIRMED. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25-02-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT DT : 25 TH FEBRUARY 2011 PK/- ITA NO.1109/RJT/2009 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-II RAJKOT 4. THE CIT-I RAJKOT 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT