Income Tax Appellate Tribunal - Amritsar
Vijay Kumar Aggarwal, Ferozepur vs Assessee on 29 June, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
AMRITSAR BENCH; AMRITSAR
(CAMP AT JALANDHAR)
BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND
SH. T.S. KAPOOR, ACCOUNTANT MEMBER
I.T.A No. 136(Asr)/2016
Assessment Year: 2007-08
Sh. Vijay Kumar Aggarwal Vs. Income Tax Officer, 3(2)
S/o, Sh. Ved Parkash Firozpur.
M/s., Ankur Carries
Bazar No.5, Firozpur
PAN: AEDPA-9043C
(Appellant) (Respondent)
Appellant by: Sh. Y.K.Sud (CA)
Respondent by: Sh. A.N.Mishra (DR)
Date of hearing: 22.06. 2016
Date of pronouncement: 29.06.2016
ORDER
PER T.S.KAPOOR (AM):
This is an appeal filed by assessee against the order of learned CIT(A), Bathinda dated 05.01.2016, for Asst. Year:2007-08.
2. The assessee has raised the following grounds of appeal.
"(i). That the CIT(A) was not justified in upholding the order of AO and dismissing the appeal of the assessee which was remanded to him by the ITAT with a specific direction.
(ii). That CIT(A) again failed to dispose off the rectification application which was directed by the ITAT to be disposed off and thereby he has shown total judicial indiscipline by not deciding the appeal of the asessee as per the direction of the ITAT.2 ITA No.136 (Asr)/2016
Asst. Years: 2007-08
(iii) That CIT(A) was not justified in confirming the addition of Rs.3,47,670/- made on account of income from trucks, whereas the income was to be assessed u/s 44AE of the Income Tax Act.
(iv) That the CIT(A) was not justified in ignoring the reply, submissions and the affidavit filed by the assessee in respect of number of trucks owned by the assessee.
(v) The order of the CIT(A) is against the law and facts of the case."
3. The brief facts of the case as noted in the impugned order are that the Hon'ble Tribunal had restored the matter to learned CIT(A) vide its order dated 07.09.2015 with the following directions.
"9 Now, it is the specific requirement of section 44AE that for the said section to become applicable, the ownership of the assessee must not exceed 10 goods carriers at any time during the previous year. Therefore, to ascertain the applicability or otherwise of the provisions of section 44AE of the Act, it needs to be first decided as to whether the assessee did or did not own more than 10 trucks during the year.
10. In this view of the matter, this issue is remitted to the learned CIT(A) to be decided afresh in accordance with law, on first deciding the assessee's aforesaid rectification application. The issue as to whether the addition made by the AO is to be sustained or to be deleted would depend on the finding to be arrived at by the learned CIT(A) with regard to the rectification application. It is ordered accordingly. The assessee shall be offered adequate opportunity of hearing to support his case and the assessee shall cooperate in the remand proceedings.
4. In view of the above directions the assessee again appeared before learned CIT(A) and the learned CIT(A) has decided the issue by holding as under:
"Now the appeal against the quantum assessment stands redecided by the Hon'ble Appellate Tribunal, Amritsar in which the directions for determining the ownership of the number of trucks (ibid) have been given. The appellant was given an opportunity to explain, pursuant to which, it was stated vide an affidavit that, during the year under consideration, the appellant had only seven trucks. The submissions of the appellant is found 3 ITA No.136 (Asr)/2016 Asst. Years: 2007-08 acceptable to the effect that only seven trucks owned by the appellant were utilized for the transportation business during the year consideration. However, such a finding does not affect the assessment of income. In the assessment order, it was categorically held by the AO that the appellant was not entitled for the provisions of Section 44AE of the Act as the appellant's income was pursuant to the business contract and not from plying hiring or leasing of goods carriers. This proposition was confirmed in appeal by the then learned CIT(A). The issue was also considered by the present appellant authority in the appellate proceedings qua the penalty order, wherein it was noticed and recorded that the appellant was in receipt of income from business contract in which there was no stipulation of execution of the contract by way of only the trucks owned by the appellant. While deciding the present matter also, the appellant was given an opportunity to produce any document to suggest that in execution of the contract with M/s Hero Honda Ltd, only the seven trucks owned by the appellant were used. In response thereto, it was merely suggested that the company expressed its inability to provide the requisite information as it relates to a period which is more than six years old.
In this view of the matter and what has been stated above, it is held that though the appellant was the owner of seven trucks as stated during the year under consideration, yet there is no scope of the applicability of the provisions of section 44AE and assessment of income as per the provisions contained therein. On account of the fact that the appellant had executed a business contract and was not in the business of plying, hiring of goods carriages. There is no evidence to the fact that the entire business of supply of motorcycles pursuant to the contract with M/s Hero Honda Ltd. was effected through the appellant's owned goods carriages."
From the above findings of the learned CIT(A), we find that though he admits that assessee had owned only seven trucks but he did not accept that the provisions of Section 44AE were applicable to the assessee company. Therefore, to arrive at the correct decision, we have to visit the provisions of Section 44AE of the Act which are reproduced below.
"44AE. (1) Notwithstanding anything to the contrary contained in section 28 to 43C, in the case of an assessee, who owns not more than ten goods carriage [at any time during the previous year] and who is engaged in the business of plying, hiring or leasing such goods carriages, the income of such business chargeable to tax under the head "Profits and gains of business or profession" shall be deemed to be the aggregate of the profits 4 ITA No.136 (Asr)/2016 Asst. Years: 2007-08 and gains, from all the goods carriages owned by him in the previous year, computed in accordance with the provisions of sub-section (2).
[(2) For the purpose of sub-section (1), the profits and gains from each goods carriage shall be an amount equal to seven thousand five hundred rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or an amount claimed to have been actually earned from the vehicle, whichever is higher.] (3) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1), be deemed to have been already given full effect to and no further deduction under those sections shall be allowed."
5. The Assessing Officer had held that as per the terms and conditions of contract with M/s Hero Honda Ltd. the assessee had received an amount of Rs.81,51,591/- from the company and out of receipts, the Assessing Officer had further observed that assessee had withdrawn certain amounts for making payment of installments of loans in respect of Cars and Trucks and had also incurred expenses out of this account and after considering depreciation claim the Assessing Officer arrived at an amount of Rs.3,47,670/- to be added to the return of income of the assessee. The learned CIT(A) had also upheld the same and in the second round of proceedings also he had held that assessee was not engaged in the business of plying and hiring of Trucks, however, he has accepted the fact that assessee owned seven trucks which were less than 10 Trucks. In view of the facts, the provisions of 44AE are clearly applicable as the section itself starts with the word "Notwithstanding anything to the contrary contained in section 28 to 43C". The Tribunal's directions in this respect were very clear as it had remanded back to the 5 ITA No.136 (Asr)/2016 Asst. Years: 2007-08 learned CIT(A) to ascertain the fact as to whether assessee owned more than 10 Trucks or not . Since this fact has been accepted by learned CIT(A), therefore, the provisions of Section 44AE were clearly applicable. The learned CIT(A) is wrong in not following the judicial discipline as the only direction of ITAT was to decide the appeal after ascertaining the number of Trucks whereas he after accepting the fact that assessee owned seven Trucks again did not apply the provisions of Section 44AE which is not as per law.
6. In view of the above facts, we are in agreement with the arguments of learned AR that provisions of Section 44AE were clearly applicable.
7. In view of the above, the appeal filed by assessee is allowed.
Order pronounced in the open Court on 29th June, 2016.
Sd/- Sd/-
(A.D. JAIN) (T. S. KAPOOR)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 29.06.2016.
/PK/ Ps.
Copy of the order forwarded to:
(1) The Assessee:
(2) The
(3) The CIT(A),
(4) The CIT,
(5) The SR DR, I.T.A.T.,
True copy
By order