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Showing contexts for: 44ae in Commissioner Of Income Tax vs Anil Kumar Arya on 4 April, 2008Matching Fragments
1. The Revenue has filed the present appeal under Section 260A of the IT Act, 1961 (for short 'the Act') against the order dt. 31st Jan., 2007 passed by the Income-tax Appellate Tribunal, Delhi Bench (I), Delhi (for short 'the Tribunal'), in ITA No. 122/Del/2005 for the asst. yr. 2001-02 raising the following proposed substantial questions of law:
(1) Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal has erred in law and on facts in upholding the order of CIT(A) in deleting the addition of Rs, 37,09,580 computed on the basis of applying 8 per cent profit from contract receipts of 28 trucks because the case of the assessee falls outside the ambit of Section 44AE as the amendments at any time during the previous year in Section 44AE is effective from 1st April, 2004. The assessee's case is related to asst. yr. 2001-02, hence clause at any time during the year in Section 44AE is not applicable in the case of the assessee in the relevant assessment year i.e., asst. yr. 2001-02?
2. The assessee is a transport contractor and is engaged in the business of supplying oil tankers on hire to various oil companies. The return of income in this case was filed by the assessee on 25th Sept., 2001 declaring total income of Rs. 1,96,590. The said return was processed under Section 143(1)(a) of the Act. Later on the case was selected for scrutiny. The assessee was issued notice under Section 143(2) of the Act.
3. Reply was filed by the assessee. No books of account are stated to have been maintained by him on the plea that his case is covered under the provisions of Section 44AE of the Act. The AO reached the conclusion that provisions of Section 44AE are not applicable in the case of the assessee and the assessee was required to maintain regular books of account and get these audited as per Sections 44AA and 44AB of the Act. The AO estimated the total Income of the assessee on the basis of gross receipts earned by him by applying a net profit of 8 per cent and made additions vide his order dt. 27th Feb., 2004.
4. Aggrieved against this order, the assessee filed an appeal before the Commissioner of Income-tax (Appeals), Rohtak [for short 'the CIT(A)']. The CIT(A), Rohtak vide his order dt. 28th Oct., 2004 partly allowed the appeal and held that at no point of time, the assessee owned more than 9 trucks during the accounting year of appeal and directed the assessment of the income from business of trucks to be made at Rs. 1,96,000 as returned plus Rs. 24,000.
5. Not satisfied with the order of the CIT(A), Rohtak, the Revenue filed the present appeal challenging the said order before the Tribunal. The main argument of the Revenue before the Tribunal was that the assessee had failed to produce the books of account or the registration certificates of various tankers/trucks to verify as to whether or not the assessee was owning more than 10 trucks so as to verify the applicability of Section 44AE of the Act. The Tribunal found that the dispute is essentially factual in nature and as per the computation of income filed by the assessee, the total number of tankers owned by the assessee does not exceed 10 at any time during the previous year relevant to the assessment year under consideration and there is no material brought on record by the Revenue to controvert the said finding and therefore, the provisions of Section 44AE have been rightly held to be applicable to the assessee.
6. We have heard Mr. Yogesh Putney, advocate learned Counsel for the Revenue and perused the record. The Tribunal has given a pure finding of fact to the effect that total number of trucks owned by the assessee does not exceed 10 at any point of time during the assessment year under consideration and there is no material brought on record by the Revenue to controvert the said factual finding. Section 44AE is a special provision for computing the profits and gains from the business of plying, hiring or leasing of goods carriages. It provides that income from plying hiring, leasing goods carriages shall be computed at Rs. 2,000 per month for every vehicle owned by an assessee. The provisions of Section 44AE of the Act are applicable to only those assessees who do not own more than ten goods carriage.