Income Tax Appellate Tribunal - Chennai
Thiruvengatam Vinayagam, Chennai vs Ito, Non Corp Ward -10(5), Chennai on 30 May, 2019
आयकर अपील य अ धकरण, 'सी' यायपीठ, चे नई
IN THE INCOME TAX APPELLATE TRIBUNAL, 'C' (SMC) BENCH : CHENNAI
ी इंटूर रामा राव, लेखा सद य एवं
ी ध ु व
ु आर.एल रे डी, या यक सद य के सम
[BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER
AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER]
आयकर अपील सं./I.T.A. No.75/CHNY/2019.
नधा$रण वष$ /Assessment year : 2015-2016.
Thiruvengatam Vinayagam, Vs. The Income Tax Officer,
No.2/9, Bye Pass Road, Non Corporate Ward 10(5)
Red hills, Chennai.
Chennai 600 052.
[PAN AAGPV 1428F]
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ( क) ओर से/ Appellant by : Ms. Meera Suresh, FCA
+,यथ( क) ओर से /Respondent by : Shri. Mathivanan, IRS, JCIT
सन
ु वाई क) तार ख/Date of Hearing : 08-05-2019
घोषणा क) तार ख /Date of Pronouncement : 30-05-2019
आदे श / O R D E R
PER INTURI RAMA RAO, ACCOUNTANT MEMBER
This is an appeal filed by the Assessee directed against the order of the Commissioner of Income Tax (Appeals)-12, Chennai ('CIT(A)' for short) dated 18.12.2018 for the Assessment Year (AY) 2015- 2016.
:- 2 -: ITA No.75 /20192. 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 the 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 assessing officer to compute the taxable income under section 44AE of the Act considering the nature of assessees business.
The assessee rely on the judgment of the Honorable Income Tax Appellate Tribunal, Surat in the case of Gayathri Corporation vs. Income Tax Officer, Ward-5(1) Surat in ITA No.1099/Ahd1204.
3. The learned CIT-[A] erred in confirming the addition 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 addition made by the Assessing Officer towards FC charges amounting to Rs.5,37,610/-.
5. The learned CIT-[A] erred in confirming the addition 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 addition of FC Charges amounting to Rs. 5,66,667/-.
7. The appellant craves leave of the learned Hon'ble Income Tax Appellate Tribunal, to add, delete, amend or otherwise modify one or more of the above grounds either
3. The brief facts of the case are as under:
The appellant is an individual engaged in the business 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 :- 3 -: ITA No.75 /2019 said return of income, the assessment was completed by Income Tax Officer, Non Corporate Ward, 10(5), Chennai (in short ''the AO), vide order dated 06.11.2017 passed u/s. 143(3) of the Income 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) 14,850
Professional charges paid without
TDS
:- 4 -: ITA No.75 /2019
4. Being aggrieved by the above additions, the assessee
preferred an appeal before ld. CIT(A), who vide impugned order deleted the additions made by the Assessing Officer on delivery charges, prior period expenses, professional charges, bank interest and national permit charges and the balance additions had been confirmed.
5. Being aggrieved by the order of the ld. Commissioner of Income Tax (Appeals), the appellant is in appeal before 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 strictly applicable to the assessee, guidance can be taken from the provision 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 Representative placed reliance on the orders of lower authorities
7. We heard the rival submissions and perused the material on record. The Assessing Officer made several disallowance resulting in assessed income two or three times higher than the returned income.
Assessee is engaged only in transport business owning sixteen vehicles. The dispute is only with regard to estimation of income though provisions of Section 44AE of the Act are not strictly applicable. The :- 5 -: ITA No.75 /2019 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 not in dispute that the assessee was plying the goods carriage which were four. Therefore, the number of goods carriages plied by the assessee was well within the ambit of the section 44AE. The Assessing Officer has rejected the book result and has estimated the income 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, the actual dispute is only with regard to estimation of the income from trucks plying business. In our opinion, when the Legislature has provided some formula for estimation of income in the case of a transporter, 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 irrelevant 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 the above, we direct the AO to determine the income of the assessee 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 (supra). In our opinion, it is a fit case to estimate the profit provision from plying trucks at the rate :- 6 -: ITA No.75 /2019 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 of the Act.
8. In the result, the appeal of the assessee is partly allowed.
Order pronounced on 30th day of May, 2019, at Chennai.
Sd/- Sd/-
(ध ु व
ु आर.एल रे डी) (इंटूर रामा राव)
(DUVVURU RL REDDY) (INTURI RAMA RAO)
या"यक सद#य/JUDICIAL MEMBER लेखा सद य/ACCOUNTANT MEMBER
चे नई/Chennai
2दनांक/Dated: 30th May, 2019.
KV
आदे श क) + त4ल5प अ6े5षत/Copy to:
1. अपीलाथ(/Appellant 3. आयकर आय7
ु त (अपील)/CIT(A) 5. 5वभागीय + त न<ध/DR
2. +,यथ(/Respondent 4. आयकर आयु7त/CIT 6. गाड$ फाईल/GF