Income Tax Appellate Tribunal - Agra
Paras Transport Co. vs Income Tax Officer [Alongwith Ita No. ... on 18 August, 2004
Equivalent citations: (2005)92TTJ(AGRA)607
ORDER
I.S. Verma, J.M.
1. These two appeals by the different assessees are against the different orders of the CIT(A) both dt. 18th Sept., 2001, wherein he has confirmed the levy of penalty under Section 271B of the IT Act.
2. Since the issue involved in both the appeals is same, it is decided, for the sake of convenience, to dispose of both these appeals by this common/ consolidated order.
3. The facts relating to the issue involved in these appeals and as have been revealed from the records and are not in dispute are that both the appellants were carrying on the business of transporting of goods relating to various parties which involved plying of appellants' own trucks as well as engaging trucks belonging to outsiders. Return of income for asst. yr. 1997-98 by M/s Paras Transport Co. was filed on 31st March, 1999 declaring an income of Rs. 1,96,870 whereas return of income for asst. yr. 1997-98 in the case of M/s Kaushal Transport Co. was filed on 30th March, 1999 declaring an income of Rs. 70,880. From the TDS certificates enclosed by these assessees along with their respective returns of income, the AO came to know that the total receipts of M/s Paras Transport Co. were at Rs. 75,41,750 whereas that of M/s Kaushal Transport Co. were at Rs. 60,67,500. Since the receipts of each one of the appellants exceeded Rs. 40 lakhs, the AO considered them defaulter for noncompliance of provisions of Section 44AB of the Act (none of these two appellants had either got audited their accounts or had furnished report of audit as required by the provisions of Section 44AB of the Act). During the course of penalty proceedings, the assessees were called upon to show cause as to why the penalty under Section 271B should not be imposed, but none of them complied with such opportunity. Ultimately the AO imposed penalty under Section 271B of the Act in both the cases. Both the assessees went in appeal before the CIT(A), but failed. The appellant are aggrieved with the orders of the CIT(A) confirming the levy of penalty.
4. I have, heard the counsel for the assessees as well as the learned Departmental Representative.
5. The counsel for the assessee first of all submitted that, since in carrying on the business of transporter the appellants' own trucks were also involved, it was not mandatory for them to maintain the books of accounts by virtue of the provisions of Section 44AE of the Act. Therefore, the receipts received on account of plying of appellants' own trucks can be taken into account for computing the turnover for the purpose of Section 44AB of the Act. The learned counsel submitted that so far as TDS certificates were concerned, they were for all type of receipts, i.e., receipts on account of plying of their own trucks as well as on account of hiring of trucks belonging to others. The counsel further submitted that so far as receipts relating to truck belonging to other parties were concerned, though the same were routed through the assessees, being transporters and responsible for booking the goods, yet the whole of the receipts being not assessees' business receipts could not be considered as assessees' turnover. Explaining this aspect, the learned counsel submitted that so far as trucks of outsiders were concerned, though the parties used to pay total freight to the assessee but ultimately the same was to be paid to the truck owner and from such type of transactions the assessee was only receiving commission which was 1 per cent or 2 per cent. He, therefore, submitted that even if the total receipts are attributable to outsiders, then also the assessee having received only commission, the whole of the receipts cannot be considered as assessees' turnover. The counsel submitted another alternate argument which was based on the submission that so far as receipts on account of appellants' own trucks were concerned, those were only the assessees' turnover and even those receipts are excluded, The balance receipts which are attributable to truck owned by outsiders were less than Rs. 40,00,000 meaning thereby that the receipts on account of assessees' own trucks as well as on account of trucks belonging to outsiders were less than Rs. 40,00,000 in each case. The counsel, therefore, vehemently submitted that these were not fit cases for levy of penalty under Section 271B of the Act.
6. The learned Departmental Representative on the other hand, has supported the orders of the CIT(A).
7. After having considered the rival submissions, facts and circumstances of the case as well as the provisions of law in this respect, I am of the opinion that the Revenue having not disputed the fact that the amount received by the assessees were consisting of receipts on two accounts, namely receipts on account of appellant's own trucks as well as on account of trucks owned by others, but hired by the assessee, the whole of the receipts computed on the basis of TDS certificates could not be attributed as receipts on account of plying of assessees' own trucks and even if these receipts are considered as plying on assessees' own account, then also I am of the opinion that the income from assessees' own trucks being liable to be computed under Section 44AE of the Act, according to which the assessees were not under obligation even to maintain the books of accounts, no contravention of provisions of Section 44AB of the Act can be alleged.
8. Further, I am inclined to agree with the submission of the learned counsel for the assessee that so far as receipts attributable to trucks owned by others were concerned, though the same were routed through the assessee (assessees being the transporters responsible for carrying on the goods of the parties the same cannot be considered as assessees' turnover), it is common and admissible way of business of transporters that if they do not have their own trucks at the relevant time, they hire the truck owned by other parties and take responsibility for paying the transport charges to such truck owners. But at the same time it is the responsibility of the customers for transporting their goods and charge the transportation charges meaning thereby that the transporters save only a petty amount which is normally called as commission, out of transportation charges received from the parties because transportation charges has to be paid to the trucks owners.
9. In view of above discussion and facts and circumstances of the case, I am of the opinion that so far as present cases are concerned, the total receipts computed on the basis of the TDS certificates could not be considered as assessee's own receipts for the purpose of Section 44AB of the Act. Consequently I am of the opinion that so far as present cases are concerned, there was no contravention of provisions of Section 44AB of the Act. The penalty imposed under Section 271B in both the cases is, therefore, cancelled.
10. In the result, appeals of both the assessees are allowed.