2012 (3) TMI 621 - AT - Income Tax

Summary

Issues Involved:

1. Disallowance of Truck Plying Loss
2. Disallowance of Business Expenses
3. Addition u/s 68 for Gift Received in the Form of RIB Bonds
4. Addition u/s 68 for Credit in the Name of M/s. Ranjeet Securities Limited

Summary:

1. Disallowance of Truck Plying Loss:

The assessee contested the disallowance of Rs. 2,45,191/- on truck plying loss. The Tribunal found that the assessee was engaged in the business of truck plying and had maintained books of account. The major expenditure claimed was depreciation amounting to Rs. 2,60,454/- and truck running expenditure of Rs. 1,06,265/-, while earnings from the truck were Rs. 1,65,575/-. The Assessing Officer had declined to accept the loss due to the absence of books of account. However, it was established that the assessee had maintained books of account. The Tribunal directed the Assessing Officer to restrict disallowance of vehicle running expenses to 1/3rd and to allow the claim of depreciation in full as per law, thereby recomputing the loss from truck plying accordingly.

2. Disallowance of Business Expenses:

The assessee also contested the disallowance of telephone expenses, vehicle running and maintenance expenses, and traveling expenses. The Tribunal noted that the Assessing Officer had disallowed these expenses on the basis that the assessee did not maintain any call register or other mechanisms to control telephone expenses. The Tribunal directed the Assessing Officer to restrict the disallowance of vehicle running expenses to 1/3rd and to allow the claim of depreciation in full as per law.

3. Addition u/s 68 for Gift Received in the Form of RIB Bonds:

The Revenue contested the deletion of an addition of Rs. 13,39,252/- made u/s 68 in respect of a gift received by the assessee in the form of Resurgent India Bonds (RIB) from an NRI. The Assessing Officer had disbelieved the genuineness of the gift transaction, citing lack of relationship and documentary evidence to prove love and affection with the donor. The CIT(A) deleted the addition, establishing the identity, genuineness, and creditworthiness of the donor through various documents, including an affidavit and passport. The Tribunal upheld the CIT(A)'s decision, noting that the findings were not controverted by the Revenue with any positive material on record.

4. Addition u/s 68 for Credit in the Name of M/s. Ranjeet Securities Limited:

The Revenue also contested the deletion of an addition made u/s 68 in respect of the credit shown in the name of M/s. Ranjeet Securities Limited. The Tribunal did not provide specific details on this issue in the summary provided, but it can be inferred that the CIT(A) had directed to delete the addition, and the Tribunal upheld this decision as well.

Conclusion:

The appeal of the Revenue was dismissed, and the appeal of the assessee was allowed in part. The Tribunal directed the Assessing Officer to recompute the loss from truck plying and to restrict the disallowance of vehicle running expenses while allowing the claim of depreciation in full as per law.