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2015 (7) TMI 900 - AT - Income TaxAddition u/s 69 - assessee submitted before the Assessing Officer that he had three vehicles and the cash deposited represented the receipts from running of the vehicles on hire in a business of tour and travel - Held that - CIT(A) further observed that as per the provisions of Section 44AE, the income from plying, hiring or leasing of vehicles, other than heavy goods vehicles, is deemed to be ₹ 3500/- for every month or part of a month during which the vehicle is owned by an assessee. Thus the computation of income from the plying of the 4 vehicles works out ot ₹ 42000/- for each of the cars purchased in the FH 2005-06, and ₹ 38500/- and ₹ 31500/- for the cars purchased in May and July, 2006 respectively. The total income to be added in the hands of the assessee u/s. 44AE works out to ₹ 1,54,000/-. We find that Ld. CIT(A) further observed that assessee cannot claim lower profits, having failed to maintain books of account and get them audited under section 44AB, as laid down in section 44AE(7). The amount of ₹ 1,42,078/- is to be separately assessed as the investment of the assessee in purchasing the two vehicles, being the down payments for obtaining the loans. As the income from running of the vehicles on hire is computed u/s. 44AE, the addition of ₹ 11,53,350/-, presumed to be the gross receipts of hire, cannot be sustained. We further find that Ld. CIT(A) against the addition of ₹ 12,79,350/- (Rs. 11,53,350 ₹ 1,26,000) confirmed the addition of ₹ 2,96,078/-. In view of the above, we find that Ld. CIT(A) has rightly restricted the addition from ₹ 12,79,350/- (Rs. 11,53,350/- ₹ 1,26,000/-) to ₹ 2,96,078/- (Rs. 1,42,078 ₹ 1,54,000). We are of the view that that the order of the Ld. CIT(A) is a well reasoned order which does not require any interference - Decided against Revenue.
Issues Involved:
Assessment of income from running vehicles on hire under section 44AE - Addition of cash deposits in bank account under section 69A - Appeal against CIT(A) order restricting addition. Analysis: 1. Assessment of income from running vehicles on hire under section 44AE: The appellant had deposited cash in a bank account, claiming it to be receipts from running vehicles on hire. The Assessing Officer added the deposited amount to the income, as the appellant had not disclosed income from the vehicles in the return. The CIT(A) observed that the appellant failed to disclose income from vehicle operations in previous years as well. Under Section 44AE, income from vehicle operations is deemed at a specified rate per month per vehicle. The CIT(A) calculated the total income from vehicle operations and noted that the appellant cannot claim lower profits without maintaining books of account as required by law. The CIT(A) correctly restricted the addition based on a well-reasoned analysis. 2. Addition of cash deposits in bank account under section 69A: The Assessing Officer made an addition under section 69A based on the cash deposits in the bank account, as the explanation provided by the appellant was deemed unsatisfactory. The CIT(A) considered the appellant's submissions and found that the appellant had not disclosed the second business of running vehicles on hire until questioned about the bank deposits. The CIT(A) calculated the income from vehicle operations under section 44AE and made appropriate adjustments. The CIT(A) upheld the addition but restricted it after a thorough examination of the facts and legal provisions. 3. Appeal against CIT(A) order restricting addition: The Revenue appealed against the CIT(A) order that restricted the addition made by the Assessing Officer. The ITAT Delhi, after considering the arguments and records, upheld the CIT(A) order. The ITAT found the CIT(A)'s decision to be well-reasoned and in accordance with the law. As a result, the appeal of the Revenue was dismissed, affirming the CIT(A) order. In conclusion, the ITAT Delhi upheld the CIT(A) order that restricted the addition to the appellant's income, considering the provisions of section 44AE and the appellant's failure to disclose income from vehicle operations. The judgment provides a detailed analysis of the issues involved and affirms the CIT(A)'s decision based on a thorough evaluation of the facts and legal requirements.
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