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2022 (9) TMI 648 - Income Tax
Estimation of income - garnered transportation receipts - Applicability u/s 44AD for receipts on account of truck plying business - sustainability of the assessee’s claim of having garnered a sum from his transportation business i.e, plying of five heavy goods vehicles - assessee had failed to produce the “agreements” with parties for whom work was claimed to have been executed, assessee had failed to furnish details of expenses incurred in the course of his transportation business and claim of the assessee of having garnered gross receipts from plying of five trucks during the year was beyond comprehension - HELD THAT:- We would not hesitate to observe that the claim of the assessee of having garnered gross receipts from plying of five heavy goods vehicles during the year (majority of which were put to use only for part of the year) is beyond our comprehension. In so far the gross receipts as had figured in the assessee’s Form No. 26AS i.e against the parties referred at Sr. No. 3 to 7 of the aforesaid chart are concerned, we are of the considered view that there was no justification on the part of the AO to have summarily rejected the same. We, thus, direct the AO to accept the assessee’s claim of having garnered gross receipts in lieu of transportation services provided to the aforementioned parties and thus accept his income as disclosed u/s 44AE to the said extent.
Garnered transportation receipts from M/s Coal Feeder, Raipur - As a word of caution, we may herein observe that the AO shall in the course of the set-aside proceedings not remain oblivion of the probability of existence of an unholy nexus between a coal trader/transport contractor and a small time transporter/subcontractor (owning less than ten heavy goods vehicles), pursuant whereto on the basis of such connivance a bogus claim of freight expenses raised by the coal trader/transport contractor in the garb of payment of transport charges to such small time transporter/sub-contractor (owning less than ten heavy goods vehicles) who had opted to be assessed at a fixed deemed amount on a per vehicle basis as per the deeming provisions contemplated u/s 44AE the exchequer would be divested of its legal dues.
If in case the assessee is unable to substantiate his claim of having garnered transportation receipts, as claimed, from M/s Coal feeder, Raipur to the satisfaction of the AO, then, the estimation of his income as worked out by the AO i.e @8% of the gross receipts under consideration i.e Rs. 3,09,93,450/- shall be sustained.
On the other hand to the extent the assessee is able to substantiate his claim of having garnered amount from plying of his five heavy goods vehicles for/on behalf of the aforesaid party, viz. M/s Coal feeder, Raipur, the amount to the said extent shall be excluded by the AO from Rs. 3,09,93,450/- (supra) for estimating his income i.e @8%. As regards the balance amount of Rs.53,88,774/-(supra) for which no explanation as regards the service recipient/payer had been given by the assessee, we finding no infirmity in the estimation of income as regards the said amount @8%, thus, uphold the same to the said extent. The Ground of appeal No. 2 is partly allowed/allowed for statistical purposes in terms of our aforesaid observations.