TMI Blog2018 (11) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee from the business of plying the trucks deployed with M/s. HG Infra Engineering Pvt. Ltd. is ₹ 61,16,640/- and there is also pension income of the assessee which is more than sufficient to explain the source of deposits of ₹ 5,23,020/- in the bank account. From the details of bank account it is evident that there are certain cash deposits and certain deposits by clearing cheques and, therefore, once the gross receipts of the assessee is more than ₹ 61 lacs, then the said gross receipt itself is a source for depositing the amount in the bank account of the assessee. Accordingly, no justification in making the addition on account of the deposits in the bank account of ₹ 5,23,020/- when the gross receipts of the assessee was found to be more than ₹ 61 lacs. Hence the addition is deleted. When the income is computed under the presumptive provisions of section 44AE, then the provisions of section 44AA and 44AB shall not apply in so far as they relate to the business of plying, hiring or leasing of goods carrier. Accordingly, once the assessee’s income is accepted under section 44AE, then the provisions of section 44AA and 44AB are not applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The assessee did not file any return of income as per the provisions of section 139 of the IT Act, however, the AO issued notice under section 148 on 31st March, 2015. In response to the notice, the assessee filed return of income on 29th April, 2015 declaring income of ₹ 1,14,358/- comprising of salary of ₹ 51,358/- and income from business of truck operation of ₹ 63,000/-. In the assessment proceedings, the AO noted that as per 26AS, the assessee received a sum of ₹ 61,16,640/- from M/s. HG Infra Engineering Pvt. Ltd. whereas the assessee has claimed freight income at ₹ 63,000/- under section 44AE of the IT Act which is not acceptable for the reason that the assessee did not produce the details of income and other details including books of account for verification. The AO accordingly applied net profit rate at 8% on the total receipts and computed the business income at ₹ 4,89,331/-. The AO has also made an addition of ₹ 5,23,020/- on account of deposits in the bank account. The assessee challenged the action of the AO before the ld. CIT (A) and contended that when the assessee has offered the income under section 44AE, then the books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id not file the return of income under section 139 of the Act and the income under section 44AE was offered by the assessee in response to the notice under section 148 of the Act. The assessee is not permitted to take the benefit of section 44AE when no return of income was filed under section 139 of the Act. It is a case of reopening of the assessment and, therefore, the assessee cannot take the advantage of the presumptive tax but the income of the assessee has to be assessed as per the income found escaped assessment. The ld. D/R has further contended that the AO has clearly stated in the order that the assessee has failed to give the details of truck registration certificate, account statement and books of account. Therefore, in the absence of the details of the trucks filed by the assessee, the provisions of section 44AE cannot be invoked. He has relied upon the orders of the authorities below and submitted that the AO has estimated the income of the assessee @ 8% net profit on the gross business receipts which is reasonable. As regards the deposits made in the bank account, the assessee has not furnished any evidence in support of the claim that the deposits are made out of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced any material or given any finding that the assessee is owning more than three trucks, then the case of the assessee clearly falls within the ambit of section 44AE of the Act. The assessee is not maintaining any regular books of account and section 44AE clearly permits the declaration of the income on presumptive basis as per the rate prescribed under the said provision. The AO has also estimated the income of the assessee by applying net profit @ 8% on the gross receipts. We further note that the AO has not given any basis of adopting the net profit of 8% and, therefore, it is apparent that the net profit at 8% as adopted as per the provisions of section 44AD of the Act which is also part of the provision of computing the income on presumptive basis. Hence in the facts and circumstances of the case, when the assessee fulfills the conditions as prescribed under section 44AE, then the income computed by the assessee on the basis of said provision cannot be disturbed by applying the other basis which is not applicable in the case of the assessee. Hence, we delete the addition made by the AO in respect of the income from business of plying the trucks which were deployed with M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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