9911796707
TMI Blog2009 (12) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... he cumulative interpretation of Section 44AE(5)f Section 44AB and Section 271B of the Income Tax Act, 1961." 3. Briefly stated facts of the case are that the assessee is a proprietor of M/s Shradha Road Lines and filed a return of income declaring the total income of Rs.8,88,610/-. Assessee conducted transportation business not only with two light commercial vehicles (LCV) owned by the assessee but also hired the vehicles owned by the others. AO noticed that the annual gross receipts are Rs 91,33,192/-. Further, the AO noticed that the accounts of the assessee were neither audited u/s 44 AB of the Income-tax Act nor the audit report in Form No. 3CB & 3CD. The brake-up of assessee's turnover is as follows, (a) On account of two LCV Owned: Rs.63,93,234/- and (b) Other vehicles turnover; Rs.27,39,958/-. Besides the above, assessee also earned commission income from LIC business amounting to Rs.4,76,072/-. Considering the fact the annual turnover of the asessee exceeded Rs 40 lakhs, the A.O, initiated the proceeding u/s 271(B) of the Act by issuing show cause notice dated 04.06.2007. Assessee replied by stating that the turnover of Ss.63,93,234/- should not be included for purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44AE to the assessee's case despite the specific submission made before him CIT(A) erroneously held that no scheme is provided for the cases like that of the assessee with composite business activities despite subsection (5) of section 44AE. The counsel argued that the combined interpretation of provisions of sections 44AE(5), 44AB and 271B of the Act, confirms that the turnover of the business activity covered by section 44AE is required to be excluded for the purpose of determining the limit of Rs 40 lakhs given in section 44AB(1) of the Act. Further the counsel relied on the Circulars No.684 of 1994 dated 10/06/1994 & Circular No.3 of 2001 dated 09/02/2001 for the proposition that the assessee is not only entitled to the benefits of section 44AE but also to the exclusion of turnover relatable to the business with own LC Vehicles covered by section 44AE of the Act in view of its sub-section (5). 6. Further, the counsel relied on SMC Bench decision in the case of Paras Transport Co. vs. ITO, in ITA 198/AGRA/2001, (2005) 92 TTJ (Agra) 607 for the proposition that when the assessee carried a business of transportation with his own trucks as well as trucks belonging to others. Rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , we take up the relevant provisions of sectin 44AE of the Act before we analyse the contents of the circular. In this regard, section 44AE reads as under: Special provision for computing profits and gains of business of plying, hiring or Leasing goods carriages, 44AE. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, who owns not more than ten goods carriages at any time during the previous year and who is engaged hiring or leasing in the business of plying, 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 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 purposes of sub-section (1), the profits and gains from each goods carriage, - i) ... (ii) other than a heavy vehicle, shall be an amount equal to three thousand one hundred and fifty rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or, as the case may be, an amount higher t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be estimated at Rs.....for every month or part of a month during which the truck owned by the assessee. In either case, the taxpayer can declare his income from trucks at a higher amount than that specified above, 32.3 An assessee who files the return, estimating income on the basis of the specified amount per truck or estimating a higher income, will neither be required to maintain books of account under the provisions of S.44AA, nor required to get accounts audited under the provisions of S.44AB, in respect of his income from the business of plying, hiring or leasing trucks, However, even such an assessee has to comply with the requirements of both ss 44AA and 44AB in respect of his businesses which are not covered by this scheme. 32.5 The scheme is optional A system of rebuttal has been provided. A person can claim that his income in respect of the abovementioned business is lower than the specified estimate of income. In such case, he must produce necessary evidence to prove his case. Such a case will be scrutinized for regular assessment under s. 143(3). " 11. The above paragraphs are self explanatory. However, it is necessary to make a special mention about a situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e multiple businesses, which include the business of plying etc using the goods carriages taken on hire. Therefore, the above cases relied on by the assessee's Counsel are distinguishable on facts as well the issues. 13. From the above, scope of the provisions of section 44AE and the circular, we find that the assessee with two numbers of light goods carriages referred to in 44AE(2)(ii) and when declared the income higher than the Rs.3,150/- per vehicle per month as per the provision of sub-section 2(ii) of section 44AE, the assessee is rightly entitled to the benefits of section 44AE. Further, the fact that the provisions of section 44AE(5) expressly provided for the exclusion of the relatable turnover for the purposes of monetary limits provided in section 44AB(1) of the Act and the revenue authorities have not provided any specific reason on the applicability of provisions of sub-section (5) of section 44AE, we are of the considered opinion that the relevant turnover of Rs.63,93,234/- should be excluded for the purpose of section 44AA and 44AB as per the provisions of section 44AE(5) of the Act. Consequently, we dismiss the Revenue's contention that the provisions of section 44 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
