TaxTMI 
TaxTMI 
2020 (2) TMI 25
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....bserved that assessee has shown income from other sources at Rs. 1,25,040/-. Assessee was asked to furnish the details. Assessee submitted that he also carried out transport business in the name of M/s V.K. Transport wherein gross receipts were Rs. 19,88,592/- and expenditure of Rs. 18,63,552/- was incurred, but inadvertently the receipts from M/s. V.K. Transport was not shown along with business carried out in the individual name of which the books of accounts were audited. Ld. AO was not satisfied with this reply and denied the benefit of claiming expenditure u/s 57 of the Act thereby making an addition of Rs. 18,63,552/-. 3. Ld. AO also observed that during the year assessee had received gift of Rs. 10 lacs from his mother-in-law and Rs. 2,50,000/- from his father. Both the donors are relatives of the assessee and it was submitted that they declared gifts on affidavit and both had sufficient source to explain the gift. However there details and submission were not sufficient to convince the assessing officer and he accordingly made the addition for unexplained gift at Rs. 12,50,000/-. Minor addition were also towards disallowance of interest on loan at Rs. 95,247/-, addition ....
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....ther-in-law and father of the appellant at Rs. 12.50 lacs assessed as unexplained cash credit/investment resulted into doubt taxation. The addition so made u/s 68 and 69 of the Act, therefore deserved to be quashed. 5. Apropos ground No.1, 2, 3 & 4 Ld. counsel for the assessee vehemently argued referring to the following written submissions: Disallowance of all expenses of M/s. V.K. Transport The appellant derived income from excavation and transportation business under the name and style as "M/s. Vinod Kumar Jain" as well under the name and style as M/s.V.K. Transport. Separate books of accounts were maintained for both, based on which return of income was submitted declaring the same at Rs. 9,21,870/- which was assessed at Rs. 41,81,646/-. Division-wise gross receipts, expenditure and net profit as per books of account were as under :- Particulars Gross receipts including commission Expenditure Net profit Remark M/s. Vinod Kumar Jain Rs. 2,47,40,924/- Rs. 2,38,60,904/- Rs. 8,80,019/- i.e. 3.56% Audit report obtained u/s 44AB of the Act M/s.V.K. Transport Rs. 19,88,592/- Rs. 18,63,552/- Rs. 1,25,040/- i.e. 6.28% Not....
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....ion u/s 57 of the Act i.e under the head "Income from other sources" hence not permissible. b) There was no reason to exclude the business income from the scope of audit and to offer it separately under the head "Income from Other Sources". c) Direct and indirect expenses of M/s. V.K. Transport were already claimed in audited trading account. • The learned Commissioner of Income tax (A) confirmed the disallowance of entire expenditure at page - 4 of the appellate order he observed that both the receipts and expenses of the transport part of the business activity are included in the audited trading account of M/s. Vinod Kumar Jain. Thus, receipts credited in separate set of books of M/s. V.K. Transport was considered as income but expenditure was disallowed on the same grounds stated by the AO vide para-7(g) of the appellate order. While confirming the disallowance he also observed following discrepancies :- i) Gross receipts as per P & L Account of V.K. Transport was Rs. 19,88,592/- whereas as per copy of account of transportation charges it was Rs. 18,04,227/- (Page 34 of P.B). Such observation is incorrect because he did not consid....
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.... is below taxable limit hence returns were not filed by him. However, while purchasing the residential house by the appellant, he contributed a sum of Rs. 2,50,000/- for purchasing the stamps for registration and expenses thereof. He had also executed a gift deed in favour of the appellant which was duly notarized on 01.09.2009 but the same could not be produced before lower authorities because original gift deed executed was misplaced due to change of residential house. The fact regarding gift received was categorically stated during assessment as well appellate proceedings (Page 42 to 44 of P.B). In the absence of such gift deed, the capacity could not be proved before lower authorities whereas the genuineness was proved from the facts and circumstances. Copy of gift deed was found lateron with the father of the appellant. An application under Rule 24 of Income Tax (Appellate Tribunal) Rules 1983 has been filed with request to admit additional evidence. 6. Ld. counsel for the assessee also made an alternate submission though ground No.4 for providing telescopic benefit of Rs. 12.50 lacs submitting as follows: "Additional Ground of A....
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....-. After claiming expenditure of Rs. 18,63,552/- net profit of Rs. 1,25,040/-(6.28%) has been shown under the head income from other sources and for this reason the transport business receipt was not subjected to tax audited. 10. Documentary evidence filed in the paper book clearly shows that the regular books of accounts were maintained for M/s V.K. Transport. Transportation services relating to transport work were provided to various public Limited Company viz. M/s Crompton Greaves Limited and M/s. Dawat Foods Limited, and other concerns. Ledger accounts of various customers of M/s V.K. Transport are placed on record. Assessee does not own any transport vehicle and he carried out this transportation business by hiring trucks/Loory from other concerns for which charges are paid. Major expenses are towards brokerage, diesel expenses, loading services charges, Lorry charges and repairs & maintenance charges. In these given facts and circumstances, assessee having carried out the business of transport cannot be disputed. Since the assessee is carrying out business of providing transport service then certainly expenses incurred for carrying out business needs to be allowed. 11. ....