The ITO, Ward-5(3),, Ahmedabad v. Raj Roadways Pvt. Ltd.,, Ahmedabad

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' [BEFORE SHRI MAHAVIR SINGH JM & SHRI A N PAHUJA AM] ITA NO.542/AHD/2006 (ASSESSMENT YEAR:-2002-03) RAJ ROADWAYS PVT. LTD. 17 AMBICA NAGAR SOCIETY OPP. GITA PROCESS NAROL- ISANPUR ROAD AHMEDABAD [PA NO. AAACR 9245 B] V/S THE INCOME-TAX OFFICER WARD-5(3) AHMEDABAD [APPELLANT] [RESPONDENT] ITA NO.813/AHD/2006 (ASSESSMENT YEARS:-2002-03) AND ITA NO.553/AHD/2007 (ASSESSMENT YEAR:-2003-04) THE INCOME-TAX OFFICER WARD-5(3) AHMEDABAD V/S RAJ ROADWAYS PVT. LTD. 17 AMBICA NAGAR SOCIETY OPP. GITA PROCESS NAROL-ISANPUR ROAD AHMEDABAD [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI B D BAROT DR ASSESSEE BY:- NONE O R D E R A N PAHUJA: THESE THREE APPEALS-ONE BY THE ASSESSEE IN ITA NO.542/AHD/2006 AGAINST AN ORDER DATED 17-01-2006 O F THE LD. CIT(APPEALS)-XI AHMEDABAD FOR AY 2002-03 AND THE OTHER TWO BY THE REVENUE AGAINST ORDERS DATED 17-01-2006 &17.11 .2006 OF THE LD. CIT(APPEALS)-XI AHMEDABAD FOR THE AYS 2002-03 & 2003-04 RESPECTIVELY RELATE TO THE SAME ASSESSEE. THEREFORE THESE WERE HEARD SIMULTANEOUSLY AND ARE BEING DISPOSED OF THRO UGH THIS COMMON ORDER. ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 2 ITA NO.542/AHD/2006[ASSESSEE] 2. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST AN ORDER DATED 17.1.2006 OF THE OF THE LD. CIT(APPEALS)-XI AHMEDABAD FOR AY 2 002-03 . NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE THROUGH SPEED POST WHEN THE APPEAL WAS CALLED FOR HEARING NOR ANY REQ UEST FOR ADJOURNMENT WAS FILED. PRIOR TO THIS NOTICE WAS SERVED THROUGH AFF IXTURE BY THE CONCERNED AO FOR THE HEARING ON 5.4.10 WHEN ALSO NONE APPEARED. IT THEREFORE APPEARS THAT THE ASSESEE IS NOT INTERESTED IN PURSUING THE APPEAL. R ECENTLY HONBLE BOMBAY HIGH COURT VIDE THEIR ORDER DATED 17.9.2009 IN M/S CHEM IPOL VS. UNION OF INDIA IN CEA NO. 62 OF 2009 REFERRED TO A DECISION OF HONB LE APEX COURT IN SUNDERLAL VS. NANDRAMDAS AIR 1958 MP 260 WHEREIN IT WAS OBSE RVED THAT THOUGH THE ACT DOES NOT GIVE ANY POWER OF DISMISSAL IT IS AXIOMAT IC THAT NO COURT OR TRIBUNAL IS SUPPOSED TO CONTINUE A PROCEEDING BEFORE IT WHEN TH E PARTY WHO HAS MOVED IT HAS NOT APPEARED NOR CARED TO REMAIN PRESENT. HONB LE COURT THUS HELD THAT T HE DISMISSAL IS AN INHERENT POWER WHICH EVERY TRIBUNAL POSSESSES . THIS WAS APPROVED IN DR. P. NALLA THAMPY VS. SHANKAR 1984 (SUPP) SCC 631. IN NEW INDIA ASSURANCE VS. SRINIVASAN (2000) 3 SCC 242 IT WAS HELD THAT EVERY COURT OR JUDICIAL BODY OR AUTHORITY WHICH HAS A DUTY TO DEC IDE A LIS BETWEEN TWO PARTIES INHERENTLY POSSESSES THE POWER TO DISMISS A CASE IN DEFAULT. WHERE A CASE IS CALLED UP FOR HEARING AND THE PARTY IS NOT PRESENT THE COURT OR THE JUDICIAL OR QUASI JUDICIAL BODY IS UNDER NO OBLIGATION TO KEEP THE MA TTER PENDING BEFORE IT OR TO PURSUE THE MATTER ON BEHALF OF THE PARTY WHO HAD IN STITUTED THE PROCEEDINGS. THAT IS NOT THE FUNCTION OF THE COURT OR FOR THAT MATTE R OF A JUDICIAL OR QUASI JUDICIAL BODY. IN THE LIGHT OF VIEW TAKEN IN THESE DECISION S HONBLE BOMBAY HIGH COURT IN THEIR AFORESAID DECISION HELD THAT EVERY COURT OR TRIBUNAL HAS AN INHERENT POWER TO DISMISS A PROCEEDING FOR NON PROSECUTION W HEN THE PETITIONER/APPELLANT BEFORE IT DOES NOT WISH TO PRO SECUTE THE PROCEEDING . IN VIEW THEREOF AS ALSO IN THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF MULTIPLAN (INDIA) PVT. LTD. VS CIT [38 ITD 320] (DEL) AND THE DECISION OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE O F ESTATE OF LATE TUKOJIRAO ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 3 HOLKAR VS CWT [(1996) 223 ITR 480 (MP)] THE APPEAL FILED BY THE ASSESSEE IS DISMISSED IN LIMINE. ITA NO.813/AHD/2006 & ITA NO.553/AHD/2007[REVENUE] 3. THESE TWO APPEALS BY THE REVENUE AGAINST TWO S EPARATE ORDERS DATED 17-01-2006 AND 17-11-2006 OF THE LEARN ED CIT(APPEALS)-XI AHMEDABAD OR AYS 2002-03 AND 2003- 04 RESPECTIVELY RAISE THE FOLLOWING GROUNDS: ITA NO.813/AHD/2006 FOR AY 2002-03 : 1 THE LD. CIT(A)-XI AHMEDABAD HAS ERRED IN LAW AND ON FACTS WHILE DIRECTING THE AO TO ESTIMATE THE INCOME OF RS.2000/ - PER TRUCK PER MONTH INSTEAD OF RS.3000/- ESTIMATED BY THE AO PER TRUCK / PER MONTH. 2 THE LD. CIT(A)-XI AHMEDABAD HAS FURTHER ERRED IN LAW AND ON FACTS WHILE RESTRICTING THE ADDITION MADE ON ACCOUNT OF I NCOME FROM HIRED TRUCKS TO RS.50 000/- FROM RS.3 55 000/- TAKEN BY T HE AO. 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A- XI AHMEDABAD) OUGHT TO HAVE UPHELD THE ORDER OF THE AO TO THE ABOVE EXTENT. 4 IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD . CIT(A)- XI AHMEDABAD)MAY BE SET ASIDE TO THE ABOVE EXTENT A ND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RESTORED. ITA NO.553/AHD/2007 FOR AY 2003-04 : 1 THE LD. CIT(A)-XI AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN ESTIMATING THE INCOME FROM TRUCKS OWNED BY THE COMP ANY @ RS.2 000/- PER TRUCK PER MONTH INSTEAD OF @ RS.3 00 0/- PER TRUCK PER MONTH ESTIMATED BY THE AO THEREBY REDUCING THE INC OME FROM OWNED TRUCKS FROM RS.15 45 000/- TO RS.10 28 000/-. 2 THE LD. CIT(A)-XI AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DIRECTING TO DETERMINE THE INCOME FROM HIRED TRUCKS AT RS.1 00 000/- INSTEAD OF RS.6 91 564/- ESTIMATED BY THE AO. ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 4 3 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A)- XI AHMEDABAD) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. 4 IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD . CIT(A)- XI AHMEDABAD)MAY BE SET ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RESTORED 4. SINCE NONE APPEARED ON BEHALF OF THE ASSESSEE THESE APPEALS OF THE REVENUE ARE BEING DISPOSED OF AFTER HEARING THE LD. DR 5. ADVERTING FIRST TO GROUND NO.1 IN THESE TWO APP EALS FACTS IN BRIEF AS PER RELEVANT ORDERS FOR THESE TWO ASSESS MENT YEARS ARE THAT RETURNS DECLARING INCOME OF RS.2 78 440/- FOR THE AY 2002-03 AND LOSS OF RS. 26 20 540/- FOR THE AY 2003-04 FILE D ON 31.10.2002 & 28.11.2003 BY THE ASSESSEE-COMPANY ENGAGED IN TH E BUSINESS OF TRANSPORT AFTER BEING PROCESSED ON 13.3.2003 & 26. 5.2004 RESPECTIVELY U/S 143(1) OF THE INCOME-TAX ACT 1961[ HEREINAFTER REFERRED TO AS THE ACT] WERE TAKEN UP FOR SCRUTI NY WITH THE ISSUE OF NOTICE U/S 143(2) OF THE ACT ON 20.10.2003 AND 25.1 1.2004 RESPECTIVELY. DURING THE YEARS UNDER CONSIDERATION THE ASSESSEE- COMPANY MAINLY WORKED FOR HINDUSTAN COCO COLA BEVER AGES P. LTD.. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE AY 2002-03 & 2003-04 THE ASSESSING OFFICER[AO IN SHORT] ISSUE D NOTICES U/S 133(6) OF THE ACT TO VARIOUS PARTIES FOR CONFIRMAT ION OF THE ASSESSEES ACCOUNTS. ON RECONCILIATION THE AO NOTI CED IN THE AY 2002-03 THAT I). THE TOTAL OF TRANSACTIONS EFFECTED DURING THE YEAR IN THE ACCOUNTS OF THE ASSESSEE VIS--VIS IN THE ACCOUNTS OF THE PA RTIES WERE AT VARIANCE IN RESPECT OF THE FOLLOWING PARTIES: NAME OF THE PARTY TOTAL OF TRANSACTIONS AS PER ACCOUNT OF THE TOTAL OF THE TRANSACTIONS AS PER COPY OF ACCOUNT OF THE REMARKS ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 5 ASSESSEE COMPANY PARTIES RECEIVED U/S 133(6) OF THE IT ACT MINAL ROADWAYS RS.1 21 945/- RS.58 014/- TRANSPORTATION CHARGES NARMADA TRANSPORT RS.3 22 466/- RS.1 23 760/- TRANSPORTATION CHARGES WEST END TRADERS RS.18 96 486/- RS.12 61 210/- PURCHASE OF DIESEL SHRI AMBICA MOTOR BODY WORKS RS.3 95 350/- RS.4 67 000/- TRUCK REPAIRING WORK TO A QUERY BY THE AO THE ASSESSEE DID NOT OFFER AN Y SATISFACTORY EXPLANATION EXCEPT SAYING WITHOUT ANY BASIS THAT T HE DISCREPANCIES WERE AT THE END OF THE AFORESAID PARTIES; II) IN THE CASE OF ONE PARTY NAMELY M/A RAJMOTI PETROLEUM FROM WHOM THE ASSESSEE COMPANY PURCHASED DIESEL DUR ING THE YEAR REPLIED IN COMPLIANCE TO NOTICE U/S UNDER SECTION 1 33(6) OF THE ACT THAT SALES OF DIESEL TO THE ASSESSEE COMPANY HAVING BEEN MADE ON CASH BASIS ONLY ACCOUNT OF THE ASSESSEE COMPANY W AS NOT REFLECTED IN THEIR BOOKS. IN THE ABSENCE OF ACCOUNT OF THE ASSESSEE IN THE BOOKS OF THE AFORESAID PARTY THE AO OBSERV ED THAT PURCHASE OF DIESEL FOR RS.27.74.873/- FROM M/S RAJMOTI PE TROLEUM WAS NOT VERIFIABLE; III) THE FOLLOWING PARTIES DID NOT RESPOND TO NOTIC ES ISSUED U/S 133(6) OF THE ACT: 1. HARSIDDHA TRANSPORT COMPANY GANDHIDHAM 2. NEW ORIENT TRANSPORT BHAVNAGAR 3. OLYMPIC TRANSPORT RAIPUR 4. SHRI MAHADEV TRANSPORT COMPANY DEESA 5. A-ONE TYRES AHMEDABAD 7. SATNAM TYRES ANMEDABAD 8. SHRI GHANSHYAM PETROLEUM ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 6 THOUGH THE FACT OF NON RECEIPT OF REPLIES FROM THE AFORESAID PARTIES WAS POINTED OUT TO THE REPRESENTATIVES OF ASSESSE E COMPANY DURING THE COURSE OF HEARING ON 24-01-2005 NO FURTHER REP LY WAS SUBMITTED ON BEHALF OF THE ASSESSEE. BESIDES THE NOTICE ISSU ED U/S 133(6) OF THE ACT TO M/S GUJARAT CEMENT CARRIERS HAD BEEN RET URNED UNDELIVERED. THE AO THEREFORE OBSERVED THAT THE N ON-RECEIPT OF REPLIES FROM THE AFORESAID PARTIES POINTED TO THE F ACT THAT THE TRANSACTIONS HAVE NOT BEEN CORRECTLY RECORDED IN TH E ACCOUNTS OF THE ASSESSEE COMPANY; IV) THE ASSESSEE DID NOT HAVE SUPPORTING VOUCHERS I N RESPECT OF BILLS RAISED FOR OTHER DIFFERENT TRANSPORT PARTIES AND THE TRANSACTIONS RECORDED IN BILLS PREPARED BY THE ASSESSEE COMPANY WERE NOT VERIFIABLE FOR WANT OF VOUCHERS; V) ON VERIFICATION OF THE ACCOUNTS OF THE ASSESSEE COMPANY THE AO FOUND THAT MOST OF THE TRANSACTIONS WERE IN CASH A ND DESPITE REQUEST MADE VIDE ORDER SHEET ENTRY DATED 24-01-200 5 CASH BOOK BANK BOOK AND VOUCHERS WERE NOT PRODUCED FOR VERIF ICATION; AND VI) THE AUDITORS IN THE AUDIT REPORT STATED THAT V OUCHERS AND OTHER SUPPORTING HAVE BEEN VERIFIED TO THE EXTENT POSSIBL E MEANING THEREBY THAT ASSESSEE DID NOT HAVE ALL THE VOUCHER S. 6. LIKE WISE IN THE AY 2003-04 THE AO NOTICE D THAT I) THE ASSESSEE DID NOT RECONCILE THE ACCOUNTS IN T HEIR BOOKS VIS-- VIS ACCOUNTS OF THE ASSESSEE IN THE BOOKS OF M/S AK AL AUTOMOBILES M/S KRISHNA TRADING COMPANY M/S PUNJAB TYRE COMPANY SHRI K.M. PARIKH AS MENTIONED ON PAGE 3 TO 7 OF THE ASSESSME NT ORDER. THE TRANSACTION OF PURCHASE OF RS.10 500 WITH KRISHNA TRADING COMPANY AND EXCESS BILL OF RS. 30 510/- IN THE NAME OF AKAL AUTOMOBILES ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 7 RECORDED BY THE ASSESSEE WERE NOT VERIFIABLE FOR W ANT OF RELEVANT BILLS/VOUCHERS; AND II) THE FOLLOWING PARTIES DID NOT RESPOND TO NOTICE ISSUED U/S 133(6) OF THE ACT: 1.RAJMOTI PETROLEUM 2.WEST & TRADERS 3.GHEEWALA AUTOMOBILES 4.RAJMOTI ROAD MOVERS 5. LAXMI TRANSPORT AGENCY 6.HINDUSTAN COCA COAL BEVERAGES PVT. LTD. THOUGH THE FACT OF NON RECEIPT OF REPLIES FROM THE AFORESAID PARTIES WAS POINTED OUT TO THE REPRESENTATIVES OF ASSESSEE COMPANY DURING THE COURSE OF HEARING ON 9-03-2006 NO FURTHER REPLY WAS SUBMITTED ON BEHALF OF THE ASSESSEE. BESIDES T HE NOTICE ISSUED U/S 133(6) OF THE ACT TO M/S OJA PETROLEUM A ONE TY RES & DHANGURU AMARDASJI & SONS HAD BEEN RETURNED UNDELIVERED. TH E AO THEREFORE OBSERVED THAT THE NON-RECEIPT OF REPLIES FROM THE AFORESAID PARTIES POINTED TO THE FACT THAT THE TRANSACTIONS H AVE NOT BEEN CORRECTLY RECORDED IN THE ACCOUNTS OF THE ASSESSEE COMPANY. MOREOVER THE ASSSESSEE DID NOT RESPOND TO SHOWCAUS E ISSUED VIDE ORDERSHEET ENTRY DATED 9.3.2006 PROPOSING REJECTIO N OF BOOKS OF ACCOUNTS AND ESTIMATION OF INCOME OF RS. 3000/- PER TRUCK PER MONTH. 7. IN THE LIGHT OF AFORESAID DISCREPANCIES FOR THE TWO ASSESSMENT YEARS AND CONSIDERING THE FACT THAT BOOK RESULTS WE RE REJECTED IN THE AYS 1996-97 TO 98-99 & 2001-02 AND INCOME OF EACH TRUCK WAS ADOPTED @ RS. 3000/- PER TRUCK PER MONTH WHILE THE LD. CIT(A) REDUCED THE SAME TO RS.2200 PER TRUCK PER MONTH IN THESE ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 8 ASSESSMENT YEARS AND APPEAL WAS FILED BY THE REVEN UE BEFORE THE ITAT THE AO REJECTED BOOK RESULTS FOR THESE TWO ASSESSMENT YEARS HAVING RECOURSE TO PROVISIONS OF SEC. 145(3) OF THE ACT AND ESTIMATED INCOME @ RS. 3000/- PER TRUCK PER MONTH N ET OF ALLOWANCES / DEPRECIATION. ACCORDINGLY INCOME OF R S. 18 30 000/- WAS ESTIMATED FOR THE AY 2002-03 & RS. 15 45 000/- FOR THE AY 2003-04 FOR THE OWN TRUCKS. BESIDES SINCE THE AS SESSEE PAID TRUCK RENT OF RS.3 55 000/- IN THE AY 2002-03 & RS.6 91 000/- IN THE AY 2003-04 TO ITS SISTER CONCERN RAJKUMAR MARKETING P. LTD. FOR TRUCK S HIRED FROM IT AND THE ASSESSEE DID NOT FURNISH THE RELEVANT DETAILS ON A CCOUNT OF RECEIPTS FROM HIRED TRUCKS THE AO WAS OF THE OPINION THAT THE COMPANY HAD AT LEAST EQUAL MARGIN OF PROFITS FROM THE CONTRACTS COMPLETED BY TRUCKS HIRE D FROM OTHERS. IN THE ABSENCE OF ANY DETAILS OF NUMBER. OF TRUCKS HIRED OR THE PE RIOD FOR WHICH THESE WERE HIRED THE AO ADDED AN AMOUNT OF RS.3 55 000/- IN THE AY 2002-03 & RS.6 91 000/- IN THE AY 2003-04 TO THE TOTAL INCOME OF THE ASSESSEE COMPANY AS INCOME FROM HIRED TRUCKS. 8. ON APPEAL THE LD. AR ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE AO DID NOT PINPOINT ANY MISTAKES OR IRREGU LARITIES IN THE BOOKS OF ACCOUNTS EXCEPT DIFFERENCE BETWEEN CUSTOME R / SUPPLIERS BALANCES VIS-A-VIS BOOKS OF ACCOUNTS OF THE ASSESSE E. SINCE THE BOOKS OF ACCOUNTS OF THE ASSESSEE WERE AUDITED THE ASSESSEE PLEADED THE BOOKS RESULTS OF THE APPELLANT MAY BE A CCEPTED. WHILE EXPLAINING THE REASONS FOR VARIOUS DISCREPANCIES T HE ASSESSEE POINTED OUT THAT THEY HAVE NOT SUPPRESSED ANY INCOM E OR EXPENDITURE ENTRIES IN ITS BOOKS. IT WAS FURTHER P OINTED OUT ON BEHALF OF THE ASSESSEE THAT THE AO COMMITTED MISTAKES IN CALCULATING THE NUMBER OF VEHICLES IN THE AY 2002-03 AND THE ASSES SEE FURNISHED ITS OWN CALCULATIONS IN THE AY 2002-03 AS REPRODUC ED BY THE LD. CIT(A) IN PARA 3.7 OF THE IMPUGNED ORDER. LIKE WI SE IN THE AY 2003-04 THE ASSESSEE WHILE POINTING OUT THE REASON S FOR VARIOUS DISCREPANCIES PLEADED THAT THEY HAD NOT SUPPRESSED ANY INCOME OR ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 9 EXPENDITURE. ACCORDINGLY IT WAS ARGUED THAT THE AO WAS NOT JUSTIFIED IN REJECTING THE BOOK RESULTS AND ESTIMAT ING THE INCOME FOR THESE TWO ASSESSMENT YEARS. THEREFORE THE INCOME S HOWN BY THE APPELLANT MAY BE ACCEPTED IT WAS PLEADED. IN THE L IGHT OF THESE SUBMISSIONS THE LEARNED CIT(A) CONCLUDED IN HIS OR DER FOR THE AY 2002-03 AS UNDER:- 4. I HAVE PERUSED THE SUBMISSIONS OF THE A. R. OF THE APPELLANT CAREFULLY. I HAVE PERUSED THE DETAILS PRODUCED BEFO RE ME BY THE A. R. AND THE OBSERVATIONS OF THE ASSESSING OFFICER FOR ESTIM ATING THE INCOME OF THE APPELLANT FROM OWN TRUCKS. 4.1 IT MAY BE SEEN THAT CERTAIN MISTAKES HAVE BEEN POINTED OUT BY THE A. O. IN APPELLANT'S BOOKS OF ACCOUNTS. THE EXPLANA TIONS SUBMITTED BY THE A. R. APPEAR TO BE REASONABLE TO SOME EXTENT EVEN THOUGH IT CANNOT BE SAID THAT THERE ARE NO LAPSES ON THE PART OF APPELL ANT. THEREFORE TAKING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE I AM INCLI NED TO ESTIMATE RS.2000/- AS INCOME PER MONTH FROM EACH TRUCK. THE A. R. HAS GIVEN THE DETAILS OF THE TRUCKS OPERATED. IT IS ALSO SEEN THA T SOME TRUCKS HAVE BEEN SOLD AND SOME TRUCKS WERE PURCHASED DURING THE YEAR UNDER CONSIDERATION. THEREFORE ONLY ON TRUCKS OPERATED BASIS TRUCKS TO BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF ESTIMATION OF INCOME AT THE RATE OF RS.2000/- PER TRUCK PER MONTH. HENCE THE A. O. IS DIRECTED TO RECOMPUT E THE INCOME FROM OWN TRUCKS IN THE LIGHT OF ABOVE OBSERVATION. ACCORDING LY THIS GROUND OF APPEAL IS PARTLY ALLOWED. 8.1 IN RESPECT OF INCOME ESTIMATED FROM THE HIRE D TRUCKS THE LD. CIT(A) CONCLUDED IN THE AY 2002-03 IN THE FOLLOWING TERMS: . 7. THE ARGUMENTS ADVANCED BY THE A. R. HAVE BEEN P ERUSED. THE OBSERVATIONS OF THE A. R. ARE ALSO EXAMINED. IT IS SEEN THAT THE INCOME ESTIMATED BY THE A. O. EQUIVALENT TO EXPENDITURE IN CURRED CANNOT HAPPEN IN NORMAL COURSE. HOWEVER THE EXPENDITURE INCURRED BY THE APPELLANT AT RS.3 55 000/- TO EARN ONLY PALTRY AMOUNT WHICH IS A LSO NOT QUANTIFIED BY THE APPELLANT MAKES THE A. O. TO ESTIMATE THE INCOME FR OM ONE TRUCK AS MUCH AS THE EXPENDITURE INCURRED BY THE APPELLANT WHICH IS AGAIN NOT REALISTIC. 7.1 CONSIDERING THE ARGUMENT OF THE APPELLANTS AR THAT THERE COULD BE ONLY RS.24 000/- P.A. INCOME ALSO IS NOT TO BE ACCE PTABLE IN VIEW OF THE FACT THAT THE A PRUDENT BUSINESSMAN WOULD NOT EARN RS.24 000/- ONLY BY INCURRING RS.3 55 000/- AS AN EXPENDITURE. ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 10 7.2 THEREFORE HAVING CONSIDERED THE FACTS AND CIRC UMSTANCES OF THE CASE I AM OF THE VIEW THAT IT WOULD BE REASONABLE TO DETERMINE THE INCOME FROM HIRE TRUCK AT RS.50 000/-. ACCORDINGLY THE AO IS DIRECTED TO ADOPT THE ABOVE SAID INCOME AND RECOMPUTE THE TOTAL INCOME. T HE APPELLANT GETS RELIEF OF RS.2 55 000/-. THIS GROUND OF APPEAL IS P ARTLY ALLOWED. 9. LIKEWISE IN HIS ORDER FOR THE AY 2003-04 THE LD. CIT(A) CONCLUDED IN THE FOLLOWING TERMS: 3.2. I HAVE PERUSED THE SUBMISSIONS OF THE A. R. O F THE APPELLANT CAREFULLY. I HAVE PERUSED THE DETAILS PRODUCED BEFO RE ME BY THE A. R. AND THE OBSERVATIONS OF THE ASSESSING OFFICER FOR ESTIM ATING THE INCOME OF THE APPELLANT FROM OWN TRUCKS. 4.1 IT MAY BE SEEN THAT CERTAIN MISTAKES HAVE BEEN POINTED OUT BY THE A. O. IN APPELLANT'S BOOKS OF ACCOUNTS. THE EXPLANA TIONS SUBMITTED BY THE A. R. APPEAR TO BE REASONABLE TO SOME EXTENT EVEN THOUGH IT CANNOT BE SAID THAT THERE ARE NO LAPSES ON THE PART OF APPELL ANT. THEREFORE TAKING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF DECISION GIVEN IN THE APPELLANTS OWN CASE FOR THE AY 2002-03 I AM I NCLINED TO ESTIMATE RS.2000/- AS INCOME PER MONTH FROM EACH TRUCK. THE A. R. HAS GIVEN THE DETAILS OF THE TRUCKS OPERATED. IT IS ALSO SEEN THA T SOME TRUCKS HAVE BEEN SOLD AND SOME TRUCKS WERE PURCHASED DURING THE YEAR UNDER CONSIDERATION. THEREFORE ONLY ON TRUCKS OPERATED BASIS TRUCKS TO BE TAKEN INTO ACCOUNT FOR THE PURPOSE OF ESTIMATION OF INCOME AT THE RATE OF RS.2000/- PER TRUCK PER MONTH. HENCE THE A. O. IS DIRECTED TO RECOMPUT E THE INCOME FROM OWN TRUCKS IN THE LIGHT OF ABOVE OBSERVATION. ACCORDING LY THIS GROUND OF APPEAL IS PARTLY ALLOWED. 9.1 IN RESPECT INCOME ESTIMATED FROM THE HIRED TRU CKS THE LD. CIT(A) CONCLUDED IN THE AY 2003-04 THAT ANY BUSINES SMAN WOULD NOT EARN RS. 6 01 654/- ON TRUCK INCURRING EQUIVALENT E XPENDITURE. ACCORDINGLY THE LD. CIT(A) ESTIMATED THE INCOME OF RS. 1 00 000/- FROM THE HIRED TRUCK. 10. THE REVENUE IS NOW IN APPEAL BEFORE US AGA INST THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. DR ME RELY SUPPORTED THE ORDER OF THE AO WITH THE SUBMISSION THAT IN THE ABS ENCE OF DETAILS OF NUMBER OF TRUCKS WHETHER OWNED OR HIRED OR PERIOD OF THEIR ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 11 OPERATION THE LD. CIT(A) WAS NOT JUSTIFIED IN RED UCING THE ADDITION MADE BY THE AO. 11. WE HAVE HEARD THE LEARNED DR AND GONE THR OUGH THE FACTS OF THE CASE. AS IS APPARENT FROM THE IMPUGNED ORDERS THE AO REJECTED THE BOOK RESULTS IN THESE TWO ASSESSMENT YEARS IN T HE LIGHT OF CERTAIN DISCREPANCIES POINTED OUT BY HIM AS AFORESAID AND ESTIMATED THE INCOME @ RS. 3000 PER TRUCK PER MONTH IN RESPECT OF OWN TRUCKS BESIDES MAKING ESTIMATED ADDITION ON ACCOUNT OF IN COME ATTRIBUTED TO TRUCKS HIRED BY THE ASSESSEE IN THE ABSENCE OF DETAILS OF TRUCKS HIRED OR THE PERIOD FOR WHICH THESE WERE HIRED. TH E LD. CIT(A) WHILE UPHOLDING REJECTION OF BOOKS IN THESE TWO ASSESSMEN T YEARS REDUCED THE ESTIMATE @ RS. 2000/- PM PER TRUCK IN BOTH THE YEARS IN RESPECT OF OWN TRUCKS BESIDES ESTIMATING INCOME OF RS. 50 0 00 IN THE AY 2002-03 & RS. 1 LAC IN THE AY 2003-04 IN RESPECT OF TRUCKS HIRED BY THE ASSESSEE WITHOUT EVEN CONFRONTING THE RELEVANT DETAILS/EVIDENCE SUBMITTED BY THE ASSESSEE BEFORE HIM IN RESPECT OF TRUCKS HIRED BY THE ASSESSEE AND THE PERIOD OF THEIR OPERATION TO THE AO. THE REVENUE IN THE THEIR GROUNDS HAVE MERELY QUESTIONED THE ESTIMATES MADE BY THE LD. CIT(A). WE FIND THAT EVEN IN THE PRECEDING ASSESSMENT YEARS 1996-97 TO 98-99 & 2001-02 BOOK RESULTS WERE REJECTED AND INCOME WAS ESTIMATED BY AO @ RS. 3000 PER TRUCK PER MONTH . ON APPEAL THE LD. CIT(A) REDUCED THE ESTI MATE TO RS. 2 200 PER TRUCK PER MONTH. ON FURTHER APPEAL THE ITAT VI DE THEIR ORDER DATED 22.2.2007 IN ITA NO.1970/AHD./2003 FOR THE AY 1996-97 ORDER DATED 2.3.2007 IN ITA NO. 1971/AHD./2003 FOR THE AY 1997-98 ORDER DATED 11.1.2007 IN ITA NO. 4212/AHD./2003 FOR THE A Y 1998-99 AND ORDER DATED 14.3.2008 IN ITA NO. 2964/AHD./2004 FOR THE AY 2001-02 UPHELD THE FINDINGS OF THE LD. CIT(A) AND DISMISSED THE APPEAL OF THE REVENUE. EVEN THE APPEAL OF THE ASSESSEE IN ITA NO.2926/AHD./2004 FOR THE AY 2001-02 WAS DISMISSED VIDE ORDER ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 12 DATED 24.7.2008. IN NUTSHELL ESTIMATE OF RS.2 20 0/- PER MONTH PER TRUCK HAD BEEN UPHELD IN THE AYS 1996-97 TO 1998-99 & 2001-02. IN VIEW OF THE FOREGOING AND CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF SEC . 44AE OF THE ACT WE ARE OF THE OPINION THAT ESTIMATE OF 2 500/ -PER MONTH PER TRUCK IN THE AY 2002-03 WOULD BE REASONABLE. HO WEVER ESTIMATE MADE BY THE LD. CIT(A) FOR THE AY 2003-04 IS TOO LOW KEEPING IN MIND THE FACT THE LIMIT IN TERMS OF PROVISIONS OF SECTION 44AE OF THE ACT HAD BEEN INCREASED TO RS. 3 500/- PER MONTH PER TRUCK. IN THESE CIRCUMSTANCES WE ARE OF THE OPINION THAT ESTIMATE MADE BY THE AO @ RS 3000/- PER TRUCK PER MONTH IS JUSTIFIED. THE REFORE GROUND NO.1 IN THE TWO APPEALS OF THE ASSESSEE IS ALLOWED AS INDICATED HEREINBEFORE. 12. AS REGARDS ISSUE RAISED IN GROUND NO .2 IN RESPECT OF INCOME ESTIMATED BY THE LD. CIT(A) IN RESPECT OF TR UCKS HIRED THE ASSESSEE DID NOT SUBMIT ANY DETAILS OF TRUCKS HIRED BY THEM IN THESE TWO ASSESSMENT YEARS BEFORE THE AO NOR EVEN THE BRE AK OF RECEIPTS FROM THE HIRED TRUCKS. EVEN THEN WITHOUT CONFRONTIN G THE RELEVANT DETAILS/EVIDENCE SUBMITTED BEFORE HIM TO THE AO T HE LD. CIT(A) REDUCED THE ESTIMATE OF INCOME. THIS APPROACH OF T HE LD. CIT(A) IN OUR OPINION IS NOT IN ACCORDANCE WITH LAW AND PRIN CIPLES OF NATURAL JUSTICE.. AS IS APPARENT FROM THE IMPUGNED ORDERS IN OUR OPINION THE ORDER PASSED BY THE LD. CIT(A) ON THE ISSUE OF ESTIMATE OF INCOME ATTRIBUTED TO HIRED TRUCKS IS GROSSLY VIOLATIVE OF ONE OF THE FACETS OF THE RULES OF NATURAL JUSTICE IN VIEW OF THE FOREGOING WE CONSIDER IT FAIR AND AP PROPRIATE TO SET ASIDE THE ORDERS OF THE LD. CIT(A) ON THE ISSUE RAISED IN GROUND NO. 2 OF THE APPEALS AND RESTORE THE MATTER TO HIS FILE FOR DECIDING THE ISSUES RAISED IN THESE GROUNDS AFRESH IN ACCORDANCE WITH LAW AFTER ALLOWING SUFFICIENT OPPO RTUNITY TO BOTH THE PARTIES. NEEDLESS TO SAY THAT WHILE REDECIDING THE APPEAL T HE LEARNED CIT(A) SHALL PASS A SPEAKING ORDER KEEPING IN MIND INTER ALIA THE MA NDATE OF PROVISIONS OF SEC. ITA NO.542& 813/AHD/2006 AND ITA NO.553/AHD/2007 RAJ ROADWAYS P. LTD. 13 250(6) OF THE ACT. WITH THESE OBSERVATIONS GROUND NO.2 IN THE TWO APPEALS OF THE REVENUE IS DISPOSED OF. 13. GROUND NOS. 3 & 4 IN THE TWO APPEALS OF THE REVENUE BEING GENERAL IN NATURE DO NOT REQUIRE ANY SEPARATE ADJU DICATION AND ARE THEREFORE DISMISSED. 14. IN THE RESULT APPEAL OF THE ASSESSEE IS DISM ISSED IN LIMINE WHILE THAT OF THE REVENUE ARE PARTLY ALLOWED BUT F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 17-05-2010 SD/- SD/- (MAHAVIR SINGH) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 17-05-2010 COPY OF THE ORDER FORWARDED TO : 1. RAJ ROADWAYS PVT. LTD. 17 AMBICA NAGAR SOCIETY OPP. GITA PROCESS NAROL-ISANPUR ROAD AHMEDABAD 2. THE ITO WARD-5(3) AHMEDABAD 3. CIT CONCERNED 4. CIT(A)-XI AHMEDABAD 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT AHMEDABAD