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Showing contexts for: 44ae in The Commissioner Of Income Tax-I, ... vs Shri Nitin Soni on 26 April, 2012Matching Fragments
Heard Sri Dhananjay Awasthi, learned counsel for the appellant and Sri Suyash Agrawal, learned counsel appearing for the assessee-opposite party.
The assessee is proprietor of M/s Nitin Freight Carrier. He is also one of the directors of Northern Alkalies (P) Ltd. In the return, he disclosed income under Section 44AE of the Income Tax Act (hereinafter referred to as 'the Act') with the allegation that he possesses only eight trucks. Assessing Officer has made certain additions in the income of the assessee on the ground that the assessee has not been able to reply as to how he has been his meeting daily expenses. The plea raised under Section 44AE of the Act was rejected by him on the ground that the assessee has got income from other sources. The matter was carried in appeal before the CIT(A) by the assessee. The appeal was partly allowed vide order dated 08.02.2007 by the CIT(A). The matter was further carried in second appeal by the department before the Tribunal. The Tribunal has dismissed the appeal by order dated 03.09.2008, presently under appeal.
Sri Dhananjay Awasthi, learned counsel for the appellant submits that it was found by the Assessing Officer that the assessee has got income from other sources. Elaborating the argument, it was submitted that even if, Section 44AE of the Act is made applicable, it was for the assessee to explain the excess income found. He submits that the Assessing Officer was justified in making addition in the income at the hands of the assessee from other sources.
In reply, Sri Suyash Agrawal, learned counsel for the assessee submits that in view of the fact that the assessee has got eight trucks, there was no question of making any addition at the hands of the assessee from other sources. More so, no other source has been mentioned in the assessment order. He also placed reliance upon the judgment of Punjab & Haryana High Court in the case of Commissioner of Income Tax v. Anil Kumar Arya (2009) 310 ITR 205.
Considered the respective submissions of the learned counsel for the parties and perused the record.
Section 44AE inserted by Finance Act, 1994 provides special provision for computing profits and gains of business of plying, hiring or leasing goods carriages. It opens with an non obstanate clause by giving an overriding effect over sections 28 to 43C, in the case of an assessee who owns not more than ten goods carriages. Income of such assessee chargeable to the tax under the head "Profits and gains of business or profession" shall be deemed to be the aggregate of the profits and gains, from all the goods carriages owned by him in the previous year, computed in accordance with the provisions of sub-section (2). The words "shall be deemed" are the keys words and they are indicative of the legislative intent that the tax shall be chargeable on presumptive income, computed as per sub-section (2) of the Section 44AE. The scope and effect of the above section has been explained in departmental circular No. 684 dated 10.06.1994. The relevant portion is extracted below:
It is not in dispute that the assessee has got eight trucks. It was also not disputed by the learned standing counsel for the department that the provisions of Section 44AE of the Act are applicable. Emphasis was laid by him that the additions made in the hands of the assessee was justified as the assessee has income more than that which is calculated as per Section 44AE of the Act. It is difficult to accept the aforesaid submission of the learned standing counsel. The very purpose and idea of enactment of such provision like Section 44AE of the Act is to provide hassle free proceedings. Such provisions are made just to complete the assessment without further probing provided the conditions laid down in such enactments are fulfilled. The presumptive income, which may be less or more, is taxable. Such an assessee is not required to maintain any account books. This being so, even if, its actual income in a given case, is more than income calculated as per sub-section (2) of Section 44AE, cannot be taxed.