TMI Blog2017 (5) TMI 1806X X X X Extracts X X X X X X X X Extracts X X X X ..... ch no defect as such has been pointed out except as above. The details of the driver salary, Bhatta expenses though were on the self made vouchers, but all the details were submitted before both the parties below and the amount paid to the recipient was also submitted. In the circumstances and facts of the case, the AO was not justified in invoking the provision of s. 145(3) of the Act and accordingly the order of the learned CIT(A) is reversed. Estimation of income - Once books of account are not found to be rejected, no estimation of the net profit can be made. However, during the impugned year the assessee has declared a net profit @ 0.58 per cent as compared to the preceding year @ 0.34 per cent and @ 0.29 per cent in the year b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other reliance placed before him, the learned CIT(A) has erred in law and in facts in maintaining the application of s. 145(3) of the Act, as well as the income assessed by learned AO. 3. That, in the facts and in the circumstances of the case and also in view of the nature of business of appellant, the learned CIT(A) erred in law and facts in maintaining the additions and variations made by learned AO, and upholding the assessed income at Rs. 74,34,519 from transport business of appellant. 4. That, in the facts and in the circumstances and in view of the material available on record, the learned CIT(A) was wholly unjust in upholding the action of applying s. 44AE of the Act by the learned AO in assessing the income of appellant f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assumptions and presumptions, without having been verified the details and information submitted by appellant regarding payment to various truck owners (Drivers) by direct enquiry from RTO Office, and/or by summoning truck owner, etc. on getting information from RTO's office by the learned AO. 10. The appellant craves leave to add, alter, amend or delete the grounds on or before the date of hearing of appeal. In fact, there are three issues which have to be addressed upon in the present appeal before us. Firstly, on the rejection of books of account by invoking the provision of s. 145(3) of the IT Act. Secondly, estimation of net profit. Thirdly, treatment of the income under s. 44AE of the Act of the trucks owned by assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not possible to ascertain their whereabouts. After considering the reply of the assessee, the AO mentioned that the assessee did not maintain proper details of the freight expenses and in absence of which, payment to the tune of Rs. 11,42,73,095 being 60.60 per cent of the gross receipts remained unverifiable. In absence of these details, the AO further could not ascertain certain vital facts, discussed as below: (i) The amount of payment paid to recipient. (ii) The mode of payment and applicability of provisions of s. 40A(3) of the Act. (iii) Whether the said payments were covered under the TDS provisions and consequent disallowances under s. 40(a)(ia) of the Act (iv) The genuineness of sundry creditors remained to be proved. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, the AO observed as under: Regarding the own trucks, there is one thing which invites attention. The assessee has not cast separate P L a/c for the head office and the own trucks but has given a consolidated P L a/c. In this P L a/c, interest and depreciation attributable to the own trucks has been claimed. The interest on own trucks is Rs. 5,15,640 and depreciation on the trucks is Rs. 20,65,200. If we leave aside the component of other expenses debited to the P L a/c which may be attributable to the own trucks and consider interest and depreciation only, then there is a net loss of Rs. (-) 12,62,607. Thus, from the activity of plying its own trucks, the assessee has declared net loss but by his accounts in a cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation number as well. All the details of the expenses have been submitted is a matter of record. Books of account are maintained in which no defect as such has been pointed out except as above. The details of the driver salary, Bhatta expenses though were on the self made vouchers, but all the details were submitted before both the parties below and the amount paid to the recipient was also submitted. In the circumstances and facts of the case, the AO was not justified in invoking the provision of s. 145(3) of the Act and accordingly the order of the learned CIT(A) is reversed. 9. As regards the estimation of income, once books of account are not found to be rejected, no estimation of the net profit can be made. However, during the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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