1989 (5) TMI 107 - AT - Income Tax

Tribunal upholds income additions from truck and taxi businesses, dismissing taxpayer's appeal.

AMRIK LAL KHURANA. Versus INCOME TAX OFFICER.

The Tribunal upheld the ITO and CIT(A)'s additions regarding income from the truck plying business and ownership and income from taxi No. URC 7288. The ... - Issues Involved:1. Estimation of income from truck plying business.2. Ownership and income from taxi No. URC 7288.Issue-wise Detailed Analysis:1. Estimation of Income from Truck Plying Business:The assessee, a partner in M/s Khurana Roadways, derived income from plying four trucks. During a search on 5th August 1983, note books and documents were seized, revealing income and expenditure related to these trucks. The assessee did not maintain regular books of accounts and had been showing income on an estimated basis. The ITO applied Section 145 of the Act due to the lack of regular books.The assessee disclosed an income of Rs. 1,31,000 from four trucks for the assessment year 1982-83. The ITO found this basis unacceptable, noting that the same truck models in the case of another partner yielded higher income. The ITO added Rs. 30,000 to the disclosed income, considering the surrendered amount of Rs. 25,000 as income from the truck plying business.The CIT(A) examined the seized note books and calculated the gross earnings from the four trucks for November and December 1981, averaging Rs. 42,500 per month, leading to estimated gross receipts of Rs. 5 lakhs for the year. After considering expenses, the net income was estimated at Rs. 2.5 lakhs. The CIT(A) upheld the addition of Rs. 30,000 as reasonable and justified.The assessee argued that the income estimation should be based on the age of the trucks, citing similar cases where such a basis was accepted. However, the Tribunal found that the gross receipts indicated by the seized documents justified the addition of Rs. 30,000, deeming it reasonable and justified.2. Ownership and Income from Taxi No. URC 7288:A document found during the search related to taxi No. URC 7288, registered in the name of Ashok Kumar, the assessee's sister's son. The ITO noted that the taxi was purchased for Rs. 62,000, with Rs. 40,000 advanced by UCO Bank and the balance remaining unexplained. The ITO concluded that the taxi belonged to the assessee, who repaid the bank loan and subsequently transferred the taxi to his name, assessing an income of Rs. 30,000 from the taxi.The CIT(A) found that the seized note books recorded expenses for running the taxi, indicating that the assessee was meeting all expenses, including loan repayments. The CIT(A) concluded that the taxi was owned by the assessee, estimating the income from the taxi at Rs. 28,000.The assessee argued that the taxi was purchased by Ashok Kumar, who obtained a bank loan for it, and that there was no evidence showing the assessee's ownership. However, the Tribunal found that the seized documents and statements indicated that the assessee bore the expenses and repaid the loan, supporting the conclusion that the taxi was owned by the assessee. The Tribunal upheld the CIT(A)'s estimation of income from the taxi as fair and reasonable.Conclusion:The appeal was dismissed, with the Tribunal upholding the additions made by the ITO and CIT(A) regarding the income from truck plying business and the ownership and income from taxi No. URC 7288.