TMI Blog2017 (5) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... taking a guidance under section 44AE of the Act. The AO ought to have not enhanced the income at such a level under garb of making disallowance on estimate basis. The ld.CIT(A) has erred in rejecting ground no.2 of the assessee’s appeal, whereby it has prayed that its income ought to be computed with the help of section 44AE. We direct the AO to compute the income of the assessee by taking 11 trucks at the rate prescribed in section 44AE relevant to the assessment year. The AO, thereafter grant all consequential benefits i.e. salary and interest to the partners as per section 40b of the Income Tax Act. Since we have changed very basis for determination of income, therefore all other grounds vide which partial disallowance has been upheld by the ld.CIT(A) out of various expenditure are concerned, that would become redundant, and therefore, we are not required to record specific finding on these issues. In this way, both the appeals are disposed of. - ITA No. 894/Ahd/2014, ITA No. 1099/Ahd/2014 - - - Dated:- 5-4-2017 - Shri Rajpal Yadav, Judicial Member And Shri Amarjit Singh, Accountant Member Assessee by : Shri Mehul Shah, AR Revenue by : Shri Albinus Tirkey, Sr.DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove the genuineness of entire Cartage and Labour expenses during the assessment proceedings as well as during the appellate proceedings. 3. On the facts and in the circumstances of the case and in law, the lid.CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld.CIT(A)-1, Surat may be set-aside and the Assessing Officer's order may be restored. 3. Ground no.3 in the appeal of the Revenue and ground no.5 in the appeal of the assessee are general grounds of appeal. They do not call for recording of any specific finding, hence rejected. 4. Ground no.1 and 2 in the Revenue s appeal and ground no.3 and 4 of assessee s are inter-connected with each other. The ld.AO has made a disallowance of ₹ 3,30,858/- out of truck expenses at the rate of 25%. The ld.CIT(A) has restricted this disallowance to 10%. Therefore, the assessee is aggrieved with the confirmation of disallowance at 10%, on the other hand, the Revenue is aggrieved with part deletion of addition. Similar are the facts with regard to ground no.4 in the assessee s appeal and ground no.2 in the Revenue s appeal. 5. We take these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposition mooted by the assessee would be justifiable. The Hon ble Delhi High Court has also observed that expression reason to believe employed in section 147 of the Income Tax Act would indicate that there should have a relation or link with an objective fact in the formation of information or facts external to the material on record showing that income has escaped assessment. In the present case, a perusal of the reason would indicate that the AO had the information and therefore he was justified in issuing notice under section 148 of the Act. We do not find any merit in ground no.1 of the assessee s appeal. It is rejected. 10. Now we take ground nos.2, 3 and 4 of the assessee s appeal along with ground no.1 and 2 of the Revenue s appeal. 11. Brief facts of the case are that the assessee has debited a sum of ₹ 13,23,432/- under the head truck expenses. According to the AO, the assessee could not produce complete details and supporting evidence to support claim of expenses. Accordingly, he disallowed 25% of such expenses and made addition of ₹ 3,30,858/-. On appeal, the ld.CIT(A) re-appreciated this issue and confirmed the disallowance at 10%. He confirmed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hoc disallowance out of the expenditure, which are debited in the books. 16. We have duly considered rival contentions and gone through the record carefully. No doubt, the assessee has been maintaining books of accounts. It has filed audit report also. On page no.23 of the paper book, the assessee has placed on record details of fixed assets and how it calculated depreciation. In these details, the assessee has given registration number of 11 trucks. Out of which, one truck was not available in the first half of the year i.e. on 1.4.2006. Thus, the assessee was having 10 trucks in the beginning, but on closing of the account, it was having 11 trucks. The assessee has debited a sum of ₹ 2,73,66,599/- under the head cartage and labour expenses . The AO disallowed 25% of this expenditure which has been reduced by the CIT(A) at 10%. The question before us is that the expenditure was disallowed on estimate basis. A perusal of the computation of income made by the AO would indicate that he mainly made two additions in the declared income and determined taxable income at ₹ 72,90,020/- as against ₹ 1,17,511/- declared by the assessee. Thus, income has been multiplied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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