2018 (4) TMI 1368 - HC - Income Tax

Crane hire charges treated as turnover of the appellant - alternate plea for permission to set off the crane hire charges paid against the crane hire charges received - Held that - This particular crane higher charges received by the assessee was a part of the regular operation of the business and it was never the case of the assessee that it forms part of the total turnover. As relying on case of Commissioner of Income Tax Vs.K.Ravindranathan Nair 2007 (11) TMI 10 - Supreme Court of India we find that the Tribunal was fully justified in permitting the alternate plea of set off to be raised and there is no error in the order passed by the Tribunal.

Summary

Issues:
- Whether crane hire charges can be treated as turnover of the appellant/assessee.

Analysis:
The appellant/assessee challenged the orders passed by the Income Tax Appellate Tribunal regarding crane hire charges. The appellant contended that the crane hire charges were part of its regular business operations and should be considered as turnover. The Tribunal noted that the appellant had accepted the legal position against them and sought to set off the crane hire charges paid against those received. The Tribunal allowed this set off, considering it as business income. The High Court observed that the crane hire charges were part of the regular business operation and not part of the total turnover, citing a Supreme Court decision in a similar case involving processing charges.

The High Court referred to the Supreme Court decision, which stated that certain charges, like processing charges, should be considered as independent income and included in the total turnover to arrive at business profits. The High Court found that the Tribunal was justified in allowing the set off of crane hire charges and upheld the Tribunal's decision. Consequently, the Tax Case Appeals were dismissed, and the question of law was answered against the assessee in favor of the Revenue.