Opinion Of Eminent Legal Luminaries On Controversial Issues

Goods carriages -Computation provisions are not applicable when presumptive income is adopted u/s. 44AE

QUERY: A is having four tank lorries. He submits his Income-tax Return under presumptive scheme u/s. 44AE. Whether he can pay amount up to rupees two lakh in cash for his high speed diesel (HSD) bills?
ANSWER: Section 44AE reads as under:
“(1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in case of an assessee, who owns not more than ten goods carriages at any time during the previous year and which is engaged in the business of plying, hiring or leasing such goods carriages, the income of such business chargeable to tax under the head “Profits and Gains of Business or Profession” shall be deemed to be aggregate of profits and gains from all the goods carriages owned by him in the previous year computed in accordance with the provisions of sub-section (2)
(2) For the purpose of sub-section (1), the profits and gains from each goods carriage shall be an amount equal to seven thousand five hundred rupees for every month or part of a month during which the goods carriage is owned by the assessee in the previous year or an amount claimed to have been actually earned from the vehicle, whichever is higher ………..”
Thus section 44AE with non obstante clause to ensure that computation provisions do not have application. Hence section 40A(3) and (3A) will have no application. Therefore, where presumptive income is adopted, the question of judging the correctness of expenses cannot arise [see Pushpak Auto Centre v. ITO 158 ITD 588 (Del.)]


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