S.SIVAPERUMAL (HUF),SALEM vs. ITO WARD 2(3), SALEM

PDF · subscribers
ITA 850/CHNY/2019Status: DisposedITAT Chennai04 November 2020AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the entire receipts from Harvester Machine operations cannot be considered net income as expenses like diesel, oil, and repairs are unavoidable. The assessee's declared net income after deducting expenditures is to be taxed.

What were the facts?

The assessee, engaged in operating Harvester Machines, declared a net income of Rs. 4,49,000/- after incurring expenditures. The Assessing Officer and CIT(A) treated the entire receipts of Rs. 14,49,000/- as net income.

What were the issues?

Whether the entire receipts from operating Harvester Machines should be treated as income, or if expenses incurred in operating the machines should be deducted to arrive at the net income.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 148,Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH: CHENNAI

Before: SHRI V. DURGA RAO & SHRI S. JAYARAMAN

Hearing: 04.11.2020Pronounced: 18.11.2020

आदेश / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER:

1.

This appeal filed by the Assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), Salem in Appeal No.247/2016-17, dated 25.01.2019 relevant to the assessment year 2009 - 2010.

2 -: 2. The brief facts of the case is that the Assessee is in the business of operating ‘Harvester Machines’, filed his return of income declaring a total income of Rs.1,45,810/-. The return filed by the Assessee was initially processed u/s.143(1) of the Income Tax Act, 1961 and thereafter the assessment was re-opened by issuing a notice u/s.148 dated 28.03.2016 and the assessment was completed u/s.143(3) r.w.s.147 of the Income Tax Act, 1961.

3.

The case of the Assessee is that he has received an amount of Rs.14,49,000/- by operating the Harvester Machines and after incurring various expenditures, the net income of the assessee is of Rs.4,49,000/- The Assessing Officer is of the opinion that the entire amount received by the Assessee is the net income and therefore wanted to tax the entire receipts based on the bank statement. The same view has been confirmed by the learned Commissioner of Income Tax (Appeals)

4.

We have heard both the sides, perused the materials available on record and gone through the orders of the authorities below.

5.

We find that the entire receipts from the operation of Harvester Machines cannot be considered as the net income of the Assessee as to run a machine, particularly the Harvester Machine, diesel & oil and repairs and maintenance are to be taken into account. Therefore, the 3 -: Assessing Officer is not justified by considering the entire amount as income of the Assessee. The Assessee after deducting the expenditure incurred has offered correctly a net income of Rs.4,49,000/-. In our view, the same has to be taxed.

6.

Thus, the Assessment Order passed by the Assessing Officer and confirmed by the learned Commissioner of Income Tax (Appeals) are set aside and the appeal of the Assessee allowed.

7.

In the result, the appeal of the Assessee in I.T.A.No.850/Chny/2019 is allowed.

Order pronounced on 18th November, 2020 in Chennai.

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →