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TMI Blog2011 (4) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... ts in applying a net profit at the rate of 5 per cent on the gross freight receipts which is neither on the basis of past history of the case nor any comparable case. (5) That the authorities below have erred in law and facts in not allowing depreciation after applying a flat net profit rate." 3. The present appeal has been filed after a delay of 28 days. The assessee has moved an application for condonation of delay in filing the present appeal. The appeal was due to be filed by 27-12-2010, but was filed on 24-1-2011. The reason for delay in filing the present appeal was the oversight of the Chartered Accountant who is appearing before the lower authorities. The order of the CIT(A) was handed over to the Chartered Accountant but due to his occupation in time-barring assessment, relevant documents could not be handed over to another counsel. The Chartered Accountant, Shri Ratan Gupta has filed on record an affidavit in this regard. In the totality of the facts and circumstances of the case we condone the delay in filing the present appeal before the Tribunal and proceed to dispose off the same after taking it on record. 4. The issue raised in the present appeal is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee was of the view that in the absence of evidence being furnished by the assessee and no booking register being available with the assessee, the exact amount of commission received on freight collected on behalf of truck owners cannot be worked out. Further, the assessee was found not to have maintained any log book in respect of the journeys performed by each truck. The vouchers produced by the assessee in respect of various heads of expenses were also found wanting by the Assessing Officer. In the light of the same the Assessing Officer held the assessee not to be maintaining proper books of account, therefore, books of account were rejected under section 145(3) of the Act. The Assessing Officer show caused the assessee as to explain why income be not computed at the rate of 5 per cent as per the show-cause notice issued, contents of which are reproduced in para 2.2 at page 5 of the assessment order. The reply of the assessee in this connection was that as it had less than 50 trucks, net income should be computed as per section 44AE of the Income-tax Act as some trucks were acquired during the year and some were sold during the year. With regard to the adoption of freight rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea of the appellant is not tenable. It is an admitted fact that provisions of section 44AE are not applicable to the facts of the case of the appellant. Otherwise also, if the plea of the appellant is considered then it amounts to perpetuating a mistake. In this regard reliance is placed on the decision of the Hon'ble Supreme Court in the case of Baroda Distributors Pvt. Ltd. 155 ITR 120(SC)". Accordingly, the order of the Assessing Officer in estimating the income at the rate of 5 per cent of the gross freight receipts was upheld. 7. The assessee is in appeal against the said order of the CIT(A) both in respect of rejection of books of account, estimation of gross freight receipts and application of net profit rate of 5 per cent. The learned A.R. for the assessee after taking us through the facts of the case pointed out that the income was estimated at the rate of 5 per cent for own trucks and also outside trucks. It was further claimed by the learned A.R. that there was no basis for adoption of rate of 5 per cent as compared to the estimation made in the preceding year where the income of own trucks was estimated as per the provisions of section 44AE of the Act at Rs. 42,000 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. 5,37,326. The Assessing Officer had computed the income on the gross freight receipts by applying the net profit rate of 5 per cent. The income was assessed at about Rs. 51 lakhs after allowing deduction on account of salary and interest to the partners. 11. The issue arising before us is the estimation of income in the hands of the assessee. Once the book results shown by the assessee are not backed by proper evidence and the same are rejected under the provisions of section 145(3) of the Act, the next step is to estimate the income from business in the hands of the assessee. While estimating the income resort in such circumstances is to be made to the surrounding aspects of the business being carried on by the assessee. While estimating the income it is paramount that a fair estimation of the income earned should be made on the basis of the supporting evidence available. One such evidence is the provisions of the Income-tax Act. Section 44AE of the Act lays down special provisions for computing Profit & Gains of business of plying/hiring or leasing of goods carriage by an assessee. The section provides that where the assessee, who owns not more than 10 goods carria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer after show causing the assessee tabulated the income from trucks owned by the assessee including those purchase/sold during the year totalling 66 and computed the income of each truck by applying the provisions of section 44AE at the rate of Rs. 3500 per trucks per month. Thereafter the commission on booking was accepted and the net profits for the year were determined. The learned A.R. for the assessee has placed on record copy of the assessment order passed in the case of Majha Pahalwan Transport Carrier and pointed out that the Assessing Officer in the case of the assessee had adopted the aforesaid results. 13. The learned A.R. further pointed out that in assessee's own case the assessment relating to assessment year 2004-05 was completed by the order passed under section 143(3) of the Act vide order dated 28-12-2006 wherein the income from trucks owned by assessee being 17 trucks were estimated by applying the provisions of section 44AE of the Act and the income from outside trucks was computed at the rate of 3.5 per cent of the total gross freight receipts. 14. In view of the above said precedent being referred to by the assessee we are of the view that the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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