2017 (5) TMI 296

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....unds raised by the respective appellants as under: ITA No.894/Ahd/2014 1. On the facts and circumstances of the case as well as law on the subject, the Id. CIT(A) has erred in confirming the action of Assessing officer in reopening of assessment by issuing notice u/s sec 148 of Act and thereby framing assessment u/s 143(3) r.w.s 147 of the Act. 2. On the facts and circumstances of the case as well as law on the subject, the Id CIT (A) has erred in confirming the action of Assessing Officer in rejecting assessee's contention of its case being covered u/s 44AE of the Act. 3. Without prejudice to Ground No. 2,on the facts and circumstances of the case as well as law on the subject, the Id CIT (A) has err....

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....stances of the case and in law, the lid.CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld.CIT(A)-1, Surat may be set-aside and the Assessing Officer's order may be restored." 3. Ground no.3 in the appeal of the Revenue and ground no.5 in the appeal of the assessee are general grounds of appeal. They do not call for recording of any specific finding, hence rejected. 4. Ground no.1 and 2 in the Revenue's appeal and ground no.3 and 4 of assessee's are inter-connected with each other. The ld.AO has made a disallowance of Rs. 3,30,858/- out of truck expenses at the rate of 25%. The ld.CIT(A) has restricted this disallowance to 10%. Therefore, the assessee is aggriev....

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....he AO is precluded to reopen the assessment in the present case. In support of his contention, he relied upon the judgment of the Hon'ble Delhi High Court in the case of Madhukar Khosla Vs. ACIT, Writ Petition No.(C) 1320/2014. He placed on record copy of this decision. On the other hand, the ld.DR relied upon the order of the AO. 9. We have duly considered rival contentions and gone through the record carefully. In the present case, there was no scrutiny assessment. The return was processed only under section 143(1) of the Act. There is nothing with the assessee to say that the AO was not possessed any fresh information. The observation of the AO in the reasons to the effect is that on verification of record he found certain discrepanci....

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.... On appeal, the ld.CIT(A) re-appreciated this issue and confirmed the disallowance at 10%. He confirmed the addition of Rs. 1,32,343/- which is impugned by the assessee in its ground no.3. Deletion made by the ld.CIT(A) has been impugned by the Revenue in ground no.1. 12. Before we embark upon an inquiry on the facts of this issue, we deem it appropriate to take note of the facts relating to ground no.4 of the assessee's appeal, and ground no.2 of the Revenue's appeal. The facts with regard to this issue are that the assessee has gross receipts of Rs. 3,02,66,798/-. It has debited a sum of Rs. 2,73,66,599/- towards cartage and labour expenses. According to the AO the assessee failed to supply requisite information, and therefore, he disa....

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....r section 44AE of the Income Tax Act. 15. On the other hand, the ld.DR contended that the CIT(A) has rejected this contention of the assessee, because the assessee has maintained the books of accounts and AO has made an ad hoc disallowance out of the expenditure, which are debited in the books. 16. We have duly considered rival contentions and gone through the record carefully. No doubt, the assessee has been maintaining books of accounts. It has filed audit report also. On page no.23 of the paper book, the assessee has placed on record details of fixed assets and how it calculated depreciation. In these details, the assessee has given registration number of 11 trucks. Out of which, one truck was not available in the first half of the....

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....iages plied by the assessee were well within the ambit of the s. 44AE. The AO has rejected the book result and has estimated the income by making various disallowance out of the expenses claimed by the assessee. He also enhanced the receipt shown by the assessee. The estimated disallowance made by the AO was partly reduced by the CIT(A). Therefore, undisputedly, in the assessee's case, the actual dispute is only with regard to estimation of the income from trucks plying business. In our opinion, when the legislature has provided some formula for estimation of income in the case of a transporter, who owns less than ten goods carnages, there would not be any justification for not estimating the income of the assessee as per the formula pr....