CIT Vs. HARDARSHAN SINGH

JUDGEMENT

(1.) The revenue is aggrieved by the order dated 26.08.2011 passed by the Income Tax Appellate Tribunal in ITA 1447/Del/2011 pertaining to the assessment year 2007-08. Before the Tribunal, the assessee, who was aggrieved by the orders passed by the Assessing Officer as well as the Commissioner of Income Tax (Appeals), had, inter alia, taken the ground that the addition of Rs. 8,51,43,744/- by invoking the provisions contained in Section 40(a)(ia) of the Income Tax Act, 1961 (hereinafter referred to as 'the said Act') was erroneous.

(2.) The assessee has four trucks and is in the business of transporting goods. He also carries on the business of a commission agent by arranging for transportation of goods through other transporters. Initially, the assessee filed a return on 31.10.2007 declaring a total income of Rs. 8,57,684/-. The return was picked up on scrutiny and a notice was issued under Section 143(2) of the said Act. During the scrutiny proceedings, the assessee was required to file a revised profit and loss account. On 18.12.2009, the revised profit and loss account was filed by the assessee, wherein the details of income and expenses were given. The same is as under:- <FRM>JUDGEMENT_101_ILRDLH23_2013_1.html</FRM>

(3.) On going through the above table, it becomes clear that the assessee had shown two kinds of businesses. One is the 'lorry booking' business and the other is the 'own booking' business. Insofar as the 'own booking' business is concerned, there is no dispute that the payments received by the assessee were after deduction of tax. However, insofar as the 'lorry booking' business is concerned, it has been the stand of the assessee that the income derived from that business was by way of booking commission which has been shown at Rs. 26,02,032/-. The rest of the money received from the clients was passed on entirely to the lorry owners/ transporters. That is why the lorry booking expenses and the lorry booking income are identical.