Taxc/35/2008 Of Income Tax Officer, Raiput v. B S Bhatiya And Company

.\ HIGH COURT OF CHHATTISGARH AT BILASPURCORAM:HON'BLE SHRI YATINDRA SINGH, C.J.HON'BLE SHRI R.S. SHARMA, J. Appearance: Shri Anand Dadariya, counsel for the Appellant.Shri Shashank Dubey, Senior Counsel with Shri VikramDixit, counsel for the Respondent. JUDGEMENT(18th July, 2013) 1. This is an appeal under section 260A of the Income Tax Act, 1 961 (theAct) against the order of the Income Tax Appellate Tribunal, BilaspurBench,Bilaspur(theTribunal)dated08.02.2008inrespectofAssessment Years (AY) dismissing the appeal of theIncome TaxDepartment (the Department) and partly allowing the cross appeal of BSBhatiya & Company, Raipur (the Assessee). THE FACTS2. The Assessee engaged in[']e business of petrol and diesel pump, aswell as tanker transportation.It filed a return showing the total income of?63,690/-.The Assessing Officer (the AO) issued notice under section143(2) / 142(1) ofthe Act to the Assessee with a detailed questionnaire. 3. The Assessee filed its detailed reply on 20.11.2006.Apart fromothers, total gross receipts on the transportation charges from theHindustan Petroleum Corporation (the Corporation) were shown to be?18.49,753/-. Out of this amount, an amount of ?14,46,533/- was said tobe paid to the transporters and ?3,55,419/- was said to be spent on theother expenses for transportation. 4. The AO by his orderdated 11.12.2006 apart from others, dis-allowedthe transportationcharges of ?14,46,533/- saidtobepaidto thetransporters on the ground that no bills and vouchers were produced to ".^?psss"^\ „,•*"»»•»Ei&-."^te r-y substantiate it and added to the income of the Assessee.The totalincome was assessed to ?16,97,300/-. 5.The Assessee filed an appeal which was partly allowed by theCommissioner Income Tax (Appeals) (the CIT-A) on 22.03.2007.TheCIT-A in its order held that the income of ?14,46,533/- from the grossreceipt of ?18,49,753/- held to be on the higher side and also held thetotal income from the transportation business to be 20% of the grossreceipts of?18.49,753/-. 6.Aggrieved by the aforesaid order, the Department filed an appealbefore the Tribunal.The Assessee also filed its cross appeal.Theappeal filed by the Department was dismissed. However, the appeal filedby the Assessee was partly allowed on the ground that section 44AE ofthe Act was applicable and the income could be only as stipulated in thatsection. Hence, the present appeal. THE DECISION 7. We have heard counsel for the parties. 8.This appeal was admitted on 01.07.2009 on the following substantialquestion of law: "Whether on the facts and circumstances of the case, theTribunal was legally justified in applying provisions ofSection 44AE of the Income Tax Act in the case of theassessee overlooking the fact that theassessee is not theowner of the truck employed in the business ?" 9.Section 44AE is titled 'Special provision for computing profits andgainsofbusinessofplying,hiringorleasinggoodscarriages.'Sub-section (1) of section 44AE ofthe Act provides that it is applicable toa case of an assessee, who owns not more that ten goods carriages andin case it is applicable, then the income from the transportation businessis to be carried-out in view of sub-section (2) of section 44AE of the Act. !^HP*sli^"'"-•!4*S<""'y padma ln!?"r--! 10.In this particular case, the Assessee is a partnership firm. Thetransport carriages are not owned by the Assessee, but they are ownedby the partners and their wives. In view of the same, section 44AE wasapplicable. 11.The AO had specifically held that section 44AE was not applicable.However, the Tribunal without considering this question, applied theprovisions of section 44AE, assuming them to be applicable.However, the Tribunal without considering this question, applied theprovisions of section 44AE, assuming them to be applicable. 12.In our opinion, section 44AE is not applicable in the case of theAssessee.The question is answered in favour of the Department andagainst the Assessee. !^HP*sli^"'"-•!4*S<""'y padma ln!?"r--! 10.In this particular case, the Assessee is a partnership firm. Thetransport carriages are not owned by the Assessee, but they are ownedby the partners and their wives. In view of the same, section 44AE wasapplicable. 11.The AO had specifically held that section 44AE was not applicable.However, the Tribunal without considering this question, applied theprovisions of section 44AE, assuming them to be applicable.However, the Tribunal without considering this question, applied theprovisions of section 44AE, assuming them to be applicable. 12.In our opinion, section 44AE is not applicable in the case of theAssessee.The question is answered in favour of the Department andagainst the Assessee. 13.In view of above, the appeal is allowed.The judgement of theTribunal is set aside and thsLof the CIT-A is restored.Sd/-I '---ChiefJustice ig^ g^Radhe Shyam SharmaJudge