TaxTMI 
TaxTMI 
2004 (9) TMI 562
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.... and maintenance at Rs. 14,982 and insurance at Rs. 2,443. Thus the assessee suffered a loss of Rs. 840 from plying of this van. The assessee's contention that since complete books of account had been maintained and in view of sub-section (6) of section 44AE the assessee was exempt from income estimated under section 44AE. The Assessing Officer did not find any merit in the above contention of the assessee and observed that sub-clause (6) of section 44AE had been deleted by the Finance Act, 1997 w.e.f. 1-4-1997. Therefore, he held that the assessee had no option but to declare income from one vehicle i.e. in the case of vehicle at the rate of Rs. 1800 pm. Therefore, he by applying the provisions of section 44AE estimated the income at Rs. 1800 pm and made the addition of Rs. 22,400. 4. The assessee carried the matter to the ld. CIT(A) and stated that vehicle in question was being plied by M/s. Kohli Bros. and as per agreement the expenses were to be made by the assessee. It was stated that complete accounts of the expenses had been maintained which was duly audited and during the course of assessment proceedings, books of account with complete vouchers were produced for verifica....
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....iages, the income of such business chargeable to tax under the head "Profits and gains of business or profession" shall be deemed to be the aggregate of the profits and gains, from all the goods carriages owned by him in the previous year, computed in accordance with the provisions of sub-section (2). (2) For the purposes of sub-section (1), the profits and gains from each goods carriage- (i)being a heavy goods vehicle, shall be an amount equal to two thousands rupees for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year, or, as the case may be, an amount higher than the aforesaid amount as declared by him in his return of income. (ii)other than a heavy goods vehicle, shall be an amount equal to one thousand eight hundreds rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or, as the case may be, an amount higher than the aforesaid amount as declared by him in his return of income. (3) Any deduction allowable under the provisions of sections 30 to 38 shall, for the purposes of sub-section (1) be deemed to have been already given full effec....
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....aintained proper books of account which were audited and no discrepancy had been pointed out therein. Therefore, the assessee was entitled to benefit of sub-section (6) of section 44AE. In that view of the matter, we decline to interfere with the findings of the ld. CIT(A) on this issue. 9. Ground No. 2 of departmental appeal reads as under : "Ld. CIT(A) has further erred in deleting the addition of Rs. 98,547 which was made by the Assessing Officer on account of income from vehicle No. CHW 8425 worked out under section 44AE of Income-tax Act, 1961." 10. Facts relating to this ground are also similar to the ground No. 1. The only difference is that the vehicle No. CHW 8425 in respect of which addition had been made by the Assessing Officer, was being plied by the assessee for the distribution of his own product and no income had been shown from plying of the vehicle. The Assessing Officer found that the assessee claimed expenses of Rs. 76,947 as per following detail : "Salary Rs. 48,000 Diesel Rs. 12,215 Repair & Maintenance Rs. 14,982 Insurance Rs. 1,750 Rs. 76,947" Assessing Officer invoked the provisions of section 44AE and determ....
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....unsecured loans given, a sum of Rs. 2,68,050 was in respect of the Prop. himself and on this amount any interest charged or received will not effect the income of the assessee. The Assessing Officer, however, held that the contention of the assessee was not correct because an interest of Rs. 24,000 had been paid to M/s. H.D. Kohli & Sons. He accordingly held that the explanation of the assessee was not correct. Accordingly net chargeable interest at the rate of 15 per cent being rate of interest paid on unsecured loans, was worked out at Rs. 1,43,927 and was disallowed. 14. Before the ld. CIT(A), it was submitted that the Assessing Officer had made addition without proper appreciation of facts of the case. It was explained that the assessee had raised interest free loans amounting to Rs. 9,60,450 and had given interest-free loans amounting to Rs. 10,74,127 which included loan of Rs. 2,68,050 given to the assessee himself. Therefore, net interest free loans given worked out to Rs. 8,06,077 against which the assessee was having interest-free loans amounting to Rs. 9,60,450. It was submitted that due to clerical mistake, a sum of Rs. 24,000 was shown as interest payable to M/s. H.D....
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....her person except 'K' from whom it was claimed that interest-free loans had been taken. The net result of the above discussion is that the assessee was having more interest-free loans than interest-free loans given. So, there was no occasion to make disallowance on the basis of notional interest. In that view of the matter, we are of the view that the ld. CIT(A) rightly deleted the disallowance because non-charging of interest on an advance given by the assessee cannot be a ground for making disallowance of interest paid by the assessee on the loans raised when the assessee was having sufficient amount in the shape of interest-free loans. In the present case, the assessee was having interest-free loans to the extent of Rs. 9,60,450 in comparison to the interest-free loans given at Rs. 8,06,077. We, therefore, do not seen any merit in this ground of departmental appeal. 17. The last ground of this appeal relates to the deletion of addition of Rs. 24,000 made by the Assessing Officer on account of interest paid to M/s. H.D. Kohli & Sons. 18. As already noted while dealing with ground No. 3 of the departmental appeal that the Assessing Officer found during the course of assessme....