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

ITA 2189/CHNY/2010 | 2007-2008
Pronouncement Date: 28-07-2011 | Result: Dismissed

Appeal Details

RSA Number 218921714 RSA 2010
Assessee PAN ABAFS6875Q
Bench Chennai
Appeal Number ITA 2189/CHNY/2010
Duration Of Justice 7 month(s) 1 day(s)
Appellant ITO, Namakkal
Respondent M/s. Sengam Transports, Namakkal
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 28-07-2011
Date Of Final Hearing 21-07-2011
Next Hearing Date 21-07-2011
Assessment Year 2007-2008
Appeal Filed On 27-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D CHENNAI BEFORE SHRI N.S. SAINI AM AND SHRI GEORGE MATHAN J.M. .. I.T.A. NO. 2189/MDS/2010 [ASSESSMENT YEAR 2007-08] INCOME-TAX OFFICER WARD I(1) NAMAKKAL VS. M/S SENGAM TRANSPORTS 88 SALEM ROAD NAMAKKAL PAN NO. ABAFS 6875 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI G. BASKAR ADVOCATE DEPARTMENT BY : SHRI K.E.B. RENGARAJAN JR. STANDING COUNSEL O R D E R PER N.S. SAINI A.M :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE CIT(A) SALEM DATED 28.10.2010 FOR AS SESSMENT YEAR 2007-08. PAGE 2 OF 5 I.T.A. NO. 2189/MDS/2010 2. SOLE GRIEVANCE OF THE REVENUE IN THIS APPEAL IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN OBSERVING THAT THE ASSE SSING OFFICER WAS NOT JUSTIFIED IN ESTIMATING THE INCOME OF THE ASSES SEE FROM 68 VEHICLES AT RS. 42 000/- PER VEHICLE AND THEREBY D ETERMINING INCOME AT RS. 28 56 000/- AND DIRECTING THE ASSESS ING OFFICER TO ACCEPT THE RETURNED INCOME OF THE ASSESSEE AT RS. 4 39 826/-. 3. IN APPEAL THE LD. CIT(A) DECIDED THE ISSUE BY O BSERVING AS UNDER: THE LD. A.R. SUBMITS THAT THE VEHICLES ARE NOT ORD INARY LORRIES BUT A R E W I TH B O D IES B U I L T S P EC I F I CA LL Y FOR T R A N S P O R T IN G W E T CO N C R E T E R EA D Y M I X TO P LA C E S W H E R E CI V IL CO N S TRUCTI O N W O R K S A R E BE IN G CA R RI E D O N . W H E N EVE R T H E CO NTR A C T EES R E QUIR E T H E V E HI CLE S C ARR Y T H E CO N C R ETE READ Y MIX I M M E DI A T E L Y TO T H E WO R K P L ACE S BEFO R E T H E Y GE T DR Y . I T I S EX P L A IN E D T H AT T H E Y R U N E MPT Y O N R ETURN T R IP S A S TH E Y A R E N OT F I T FO R C ARR Y I N G O N A N Y O TH E R GO OD S . T H E AP P E LL A N T H A S N O T M AI NT A I N E D P R O P E R B OO K S OF ACC O U NT . WHIL E T H E A P PE LLAN T A DM IT T E D 0 . 5 % OF G R O SS R E CE IP T S OF R S. 8 . 7 9 CRO R ES A S I N CO M E . T H E AO A PPL I E D P R O V IS I O N S O F S ECT I O N 4 4 A E A N D ES TI M A T E D I N C O M E P E R VE HI C L E P E R A NN U M A T A R A T E OF PAGE 3 OF 5 I.T.A. NO. 2189/MDS/2010 R S . 4 2 . 000 / - PRE S C RI B ED B Y TH E SE C T ION . I T I S P O INT E D O UT B Y TH E A R T H A T TH E PR O V I S I O N S OF SE CTI O N 44 A E ARE A P PL I C A BL E O NL Y T O TH OSE ASSE SS EES W H O OWN T E N O R L ESS NU MB E R O F VE H IC L ES . T H E PR E SE N T AP P E LL A N T H A S PL I E D 6 7 VE H I C L ES ; T H E A O H A S TR E A T E D A S 6 8 . I H A V E N O HE S IT A TI O N T O A G R EE WITH TH E A R G UM E N T T H A T TH E A O S H O ULD N O T H AV E IN VO K E D TH E PR ES UMPTIV E PR OV I S I O N S O F S E C T I O N 44 AE T O TH E A PP E LL A NT ' S C AS E . E XPL A N A TION 5 T O SEC TI O N 32 ( 1 ) R EQ UIR E S THAT D E PR ECIA TI O N S H O UL D B E ALL OW E D O N A S S E T S WHIL E C O M P UTIN G T AXA B L E INCO M E W H E TH E R C L A I M E D O R NOT . IN THI S CA SE TH E A PP E LL A NT H A S N O T C L A IM E D D E PR E C I A TI O N BUT H A S E S TIM A T E D IN CO M E @ 0 . 5 % O N G R O S S TR A N S P OR T R EC EIPT S. AS TH E AO H A S APPLIED SECTION 44AR DEPRECIATION IS DEEMED TO HAV E BEEN ALLOWED IN THE ASSESSMENT IN VIEW OF THE CONTENTS OF SECTION 44AE(3). THE FACTUAL POSITION REMAINING THAT THE APPELLANT H AS RETURNED AN INCOME OF RS. 4 39 826/- AFTER CLAIMING DEPRECI ATION OF RS. 2 74 97 536/-. A COPY OF DEPRECIATION STATEMENT HA S BEEN FILED BEFORE ME. THE GROSS INCOME BEFORE DEPRECIATION FO R THE YEAR THUS WORKS TO RS. 2 79 37 362/- FOR 68 VEHICLES T HOUGH THE APPELLANT PLEADS THAT ONE OF THEM WAS A PUMP SET AN D NOT A PAGE 4 OF 5 I.T.A. NO. 2189/MDS/2010 VEHICLE. EVEN OTHERWISE GROSS INCOME OF RS. 2 79 37 362/- FOR 68 VEHICLES AMOUNTS TO AN AVERAGE OF RS. 4 10 843/ - PER VEHICLE. THIS APPEARS QUITE REASONABLE AND HENCE A CCEPTABLE. I THEREFORE DIRECT THE ASSESSING OFFICER TO ACCEPT T HE INCOME OF RS. 4 39 826/- RETURNED BY THE APPELLANT. 4. THE LD. D.R. VEHEMENTLY SUPPORTED THE ORDER OF T HE ASSESSING OFFICER WHEREAS THE LD. A.R. RELIED ON THE ORDER OF THE LD. CIT(A). 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE IT IS NOT DISPUTED THAT THE ASSESSEE HAS NOT MAINTAINED PROPER BOOKS OF ACCOUNT. FURTHER IT IS ALSO NOT I N DISPUTE THAT THE ASSESSEE OWNED MORE THAN TEN GOODS CARRIAGE AND THE REFORE THE PROVISIONS OF SECTION 44AE IS NOT ATTRACTED IN THE CASE OF THE ASSESSEE. THUS IN OUR CONSIDERED OPINION THE ACT ION OF THE ASSESSING OFFICER IS INDEFENSIBLE IN APPLYING THE P ROVISIONS OF SECTION 44AE OF THE ACT. FURTHER WE FIND THAT THE LD. CIT (A) HAS OPINED THAT THE INCOME OF RS. 4 10 843/- BEFORE DEPRECIAT ION PER VEHICLE PAGE 5 OF 5 I.T.A. NO. 2189/MDS/2010 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 A NY MATERIAL TO SHOW AS TO WHY THE INCOME BEFORE DEPRECIATION OF RS . 4 10 843/- PER VEHICLE WAS NOT REASONABLE AND SAME SHOULD HAVE BEEN ESTIMATED AT A HIGHER FIGURE. WE THEREFORE DO N OT 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. IN THE RESULT THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON 28 TH JULY 2011. SD/- SD/- (GEORGE MATHAN ) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 28 TH JULY 2011. VL COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE