TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 1395
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....lant and applying the provision of section 145(3) of the Income Tax Act, 1961. 2. That the ld. CIT(A) has erred in law and on facts in applying the net profit rate of 2% on the gross receipts and confirming the addition of Rs. 6,05,790/- against the declared income of Rs. 13,130/-. 3. That the authorities below has erred in law and on facts in not accepting the claim of the appellant as mutual association and the income is exempted from taxation on the principal of mutuality. 4. That the returned income of Rs. 13,130/- may also be deleted as it has been returned under mistake, the union is a mutual association, it cannot earn income from itself. 2. The assessee has also raised the following additional ground of appeal: "That the ld....
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....nion. Further neither any vouchers for the expenses claimed in the income & expenditure account nor any supporting documents in support of the payment made to the Truck Operator were produced. Under these circumstances, the claim of the assessee for disbursement of Receipts amongst the Truck Operators /Members cannot be held as justified. As such, I reject the books of account as maintained by the assessee under section 145(3) of Income Tax Act and keeping in view of the judgment of Hon'ble Income Tax Appellant Tribunal, Amritsar Bench, Amritsar in the case of the Bathinda Truck Operator Union, Bathinda V/s The Income Tax Officer, Ward - 1(3), Bathinda by applying Net Profit of 3% on the Gross Receipts." 6. The ld. CIT(A), upheld the AO'....
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....09) 319 ITR 173 (P&H), CIT vs. Om Overseas (2009) 315 ITR 185 (P&H) and CIT vs. Ludhiana Steel Roll Mills (2007) 295 ITR 111 (P&H). As mentioned above, the appellant during the course of assessment proceedings did not produce any evidence to show the freight payments having been made to the truck operators/owners nor complete expenditure vouchers were produced to show their genuineness, that the same were incurred wholly, exclusively and necessarily for business needs. In such a situation, the AO had no other option but to determine the income on estimate basis by invoking the provisions of section 145(3) of the Act. The various judgments relied upon by the Ld. A/R of the appellant are distinguishable on facts. In the case of CIT v. Patiala....
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....cific defects therein; that the books of account have erroneously been rejected on the ground that the assessee did not produce all the vouchers for the expenses incurred, nor any evidence was led to establish the payments made by the assessee Union to the Truck Operators. 8. The Ld. DR, on the other hand, has placed strong reliance on the impugned order. 9. It is seen that that the Assessing Authorities have rejected the books of account for the reason that the assessee did not produce all the vouchers for the expenses, nor any evidence was led to establish the payments made to the truck operators. 10. In this regard, in its reply (APB 1-2) before the AO, the assessee stated that all the freight collected by the Union is credited and th....
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.... of the Union; and that in the earlier years, i.e., assessment years 2006-07 & 2007-08, the facts of the case were the same and no addition was made by the AO on account of net profit rate. 12. Neither the AO, nor the ld. CIT(A) has controverted these submissions made by the assessee. The ledger maintained by the assessee and the bank accounts and statements have not been doubted. The expenses of the assessee for the year (APB-43) are as follows: Less Expenses To Freight paid on behalf to Truck Operator 30,289,681.00 To Salary paid 292,800.00 To Telephone Bills Expenses 11,724.00 To Power & Fuel Expenses Electric Bills Expenses 41,629.00 Generator Expenses 3,390.00....