Deepak Motors Vs DCIT (ITAT Jaipur)
Summary: The Income Tax Appellate Tribunal, Jaipur, dismissed the appeal of Deepak Motors for assessment year 2019-20 and upheld an addition of ₹16,40,000 arising from the computation of presumptive income under Section 44AE of the Income-tax Act, 1961. The assessee, a partnership firm engaged in freight transport by road, had declared income of ₹3,20,000 under Section 44AE(2)(ii). The Assessing Officer noted that it owned nine heavy goods vehicles, of which five were engaged during the relevant year, and computed income of ₹19,60,000 under Section 44AE(2)(i). The Commissioner (Appeals) confirmed the assessment. Before the Tribunal, the dispute was confined to whether the vehicles attracted the tonnage-based computation applicable to heavy goods vehicles or the fixed monthly computation applicable to other goods carriages; compliance with the remaining eligibility conditions was not disputed.
The Tribunal noted that the Explanation to Section 44AE specifically defines a heavy goods vehicle as a goods carriage whose gross vehicle weight exceeds 12,000 kilograms, while the meanings of “goods carriage”, “gross vehicle weight” and “unladen weight” are borrowed from the Motor Vehicles Act, 1988. It considered the Commissioner (Appeals)’ analysis of CBDT clarification F. No. 225/233/2019/ITA-II dated 14 August 2019, under which gross vehicle weight governs the relevant goods carriages, whereas unladen weight applies to tractors or road-rollers where gross vehicle weight is not applicable. The assessee’s counsel did not dispute that legal position. The five vehicles were TATA SIGNA 4923 vehicles with a gross weight of 49 tonnes each according to the particulars available on the Ministry of Road Transport and Highways website. The assessee nevertheless relied on their unladen weight of 10,200 kilograms, as mentioned in the registration certificates, to claim that they fell below the 12-tonne threshold.
Rejecting that contention, the Tribunal observed that the assessee had neither demonstrated nor claimed that its vehicles qualified as tractors or road-rollers. Consequently, their unladen weight could not determine their classification in the circumstances of the case. Since the gross vehicle weight admittedly exceeded 12,000 kilograms, the vehicles qualified as heavy goods vehicles and Section 44AE(2)(i) applied. The Tribunal also addressed three authorities cited by the assessee, whose copies had not been furnished. It recorded that the citation 386 ITR 144, attributed to CIT Vs. Y Subhash Reddy, actually related to Contai Co-operative Bank Ltd. Vs ACIT of the Calcutta High Court, and that the other cited authorities could not be accessed with the particulars supplied. It rejected the assessee’s arguments, confirmed the Commissioner (Appeals)’ order and dismissed the appeal.
Cases Discussed
- DCIT v G Satyanarayana — (2017) 82 taxmann.com 191 (Vishakhapatnam ITAT), as cited in the order. Cited by the assessee; the Tribunal recorded that the authority could not be accessed with the citation supplied and no copy had been furnished.
- CIT Vs. Y Subhash Reddy — [2016] 386 ITR 144 (Telangana & Andhra Pradesh High Court), as cited in the order. The Tribunal found that the reporter citation supplied did not correspond to the case named by the assessee.
- Contai Co-operative Bank Ltd. Vs ACIT — (2016) 386 ITR 144 (Calcutta High Court). Identified by the Tribunal as the decision corresponding to the citation incorrectly attributed to Y Subhash Reddy; it was not applied as authority on the Section 44AE issue.
- ITO Vs. K.K. Harnath Singh — [2009] 27 SOT 61 (Delhi ITAT), as cited in the order. Cited by the assessee; the Tribunal recorded that the authority could not be accessed with the citation supplied and no copy had been furnished.
FULL TEXT OF THE ORDER OF ITAT JAIPUR
The present appeal has been filed by the assessee against the order passed by the National Faceless Appeal Centre (NFAC), Delhi(hereinafter referred to as “Ld. CIT(A)”), dated 20.06.2025under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
2. Thegrounds raised by the assessee read as under:-
4. The appellant prays your honour indulgences to add, amend OR alter of OR any of the grounds of the appeal on OR before the date of hearing
2. Rs. 16,40,000/-: That on the facts and in the circumstances of the case, the Ld. CIT(A) has grossly erred in confirming the addition of Rs. 16,40,000/- made by the DCIT, CPC, by – computing income of Rs. 19,60,000/- (5498*1000) u/s 44AE(2)(i) as against Rs. 3,20,000/- rightly declared by the assessee u/s 44AE(2)(ii) The addition so made and sustained is contrary to the express provisions of law as well as facts of the case, and therefore, deserves to be deleted in toto.
3. That the Ld. AO has further erred in law and on facts in levying interest u/s 234A, 234B & 234C of the Act. The appellant denies its liability for levy of such interest, which is otherwise not leviable onthe facts of the case. The interest so charged being unjustified, arbitrary, and not in accordance with law, deserves to be deleted in full.
1. That the impugned assessment order passed u/s 143(3) r.w.s. 144B dated 09.09.2021 is bad in law and onfacts, being without proper jurisdiction and for various other legal and factual infirmities; hence, the same is liable to be quashed.
3. The solitary dispute in the present appeal is with respect to the income returned by the assessee on presumptive basis u/s 44AE of the Act. The assessee is a partnership firm engaged in the business of freight transport by road. For the impugned year, the assessee had shown income u/s 44AE(2)(ii) of the Act, since the assessee operated five vehicle for the period of 8 months. The AO noted that the assessee was having 9 heavy good vehicles (in short “HGV”) out of which only 5 HGVs were engaged in the year under consideration. Therefore the AO held that the income was to be determined in terms of Section 44AE(2)(i) of the Act and not sub-clause (ii) as applied by the assessee. As a result, he recomputed the income u/s 44AE(2)(i) of the Act to be Rs.19,60,000/- leading to an addition of Rs.16,40,000/- to the income of the assessee.
4. The order of the AO was upheld by the Ld. CIT(A).
5. The sole issue for consideration therefore is whether in the facts of the present case sub-clause (i) or sub-clause (ii) of Section 44AE(2) of the Act would apply for determining the income of the assessee on presumptive basis , the fulfillment of other conditions specified in Section 44AE of the Act for the assessee to claim the benefit of the said section are not disputed. The only dispute is with respect to the applicability of sub-clause (i) or sub-clause (ii) of the said section in the facts of the present case.
6. The distinction between the two sub clauses as is brought out in the order of the authorities below and which again is not disputed is with regards to the vehicles used by the assessee in its business qualifying as HGVs or other vehicles. Since for HGVs the income is determined on the basis of rate prescribed per tonof GrossVehicle Weight(GVW) or unladen weight as applicable, while for other vehicles sub-clause (ii) prescribes a fixed rate of income per vehicle. The provisions of Section 44AE(2)(i) or (ii) are reproduced hereunder for clarity:-
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Special provision for computing profits and gains of business of plying, hiring or leasing goods carriages.
44AE. (1)…..
(2) For the purposes of sub-section (1), the profits and gains from each goods carriage,—
(i) being a heavy goods vehicle, shall be an amount equal to one thousand rupees per ton of gross vehicle weight or unladen weight, as the case may be, for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year or an amount claimed to have been actually earned from such vehicle, whichever is higher;
(ii) other than heavy goods vehicle, 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 such goods carriage, whichever is higher
…….
7. Therefore in the facts of the present case, the claim of the assessee is that the vehicles employed by it qualified as other vehicles and notHGV and hence was covered under sub clause(ii) for determining the presumptive income, while the Revenue contends to the contrary that the vehicles employed by the assessee qualified as HGVs.
8. Ld. CIT(A) in his order has reproduced the provisions of Section 44AE of the Act along with the Explanation thereto as under
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5.2 Before coming to any conclusion, it is relevant to discuss section 44AE of the Act which reads as under
“(1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an assessee, who owns not more than ten goods carriages at any time during the previous year and who is engaged in the business of plying, hiring or leasing such goods carnages, the income of such business chargeable to tax under the head “Profits and gains of business or profession” shall be deemed to be the aggregate of the 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 purposes of sub-section (1) the profits and gains from each goods carriage-
being a heavy goods vehicle, shall be an amount equal to one thousand rupees per ton of gross vehicle weight or unladen weight as the case
(1) may be, for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year or an amount claimed to have been actually earned from such vehicle, whichever is higher
other than heavy goods vehicle, 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 such goods carriage, whichever is higher
(11) Explanation-For the purposes of this section-
the expressions “goods carriage”, “gross vehicle weight and (a) unladen weight shall have the respective meanings assigned to them in section 2 of the Motor Vehicles Act, 1988 (59 of 1988).
(aa) the expression “heavy goods vehicle” means any goods carriage, the gross vehicle weight of which exceeds 12000 kilograms
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9. And interpreted the provisions of the same at para 5.3 and 5.4 of his order as under:-
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5.3 In simple words, income is calculated on an estimated basis under Section 44AE of the Act irrespective of the actual profits or losses incurred. The calculation depends on the type of goods carriage
(1) For Heavy Goods Vehicles (HGVS)
A heavy goods vehicle is defined as one with a gross vehicle weight (GVW) exceeding 12.000 kg (12 metric tons). The presumptive income is Rs 1.000 per ton of gross vehicle weight or unladen weight (whichever is applicable) for every month or part of a month during which the heavy goods vehicle is owned by the assessee in the previous year.
5.4 Here, it is important to note that definition of Heavy Goods Vehicle was not taken from Motor Vehicles Act, 1988 (59 of 1988) in the explanation of section 44AE of the Act. However, as per section Section 2(16) of Motor Vehicle Act-1988 “Heavy Goods Vehicle” means any goods carriage the gross vehicle weight of which, or a tractor or a road-roller, the unladen weight of either of which, exceeds 12.000 kilograms.
…..
10. As is evident from a perusal of the above, the ld. CIT(A) ,reading the provisions of Section 44AE with the explanation to the said section ,noted that while the explanation to Section 44AE of the Act states that the expression goods carriage, gross vehicle weight and unladen weight used in sub-clause (i) of Section 44AE shall have the respective meanings assigned to them in Section 2 of the Motor Vehicles Act 1988. However, the definition of HGV was not taken from the Motor Vehicles Act 1988 in the said Explanation.
11. We have noted this finding of the Ld. CIT(A) to be correct since the explanation to Section 44AE of the Act defines the expression HGV to mean any goods carriage the gross vehicle weight of which exceeds 12000 kilograms. Therefore the HGV have been specifically defined in the Section while for the expressions good carriage, gross vehicle weight and unladen weight their definition has been borrowed from the Motor Vehicles Act 1988 Section 2.
12. Having stated so, we find that the ld. CIT(A) has referred to CBDT Circular No. 225/233/2019/ITA-II dated 14.08.2019 pointing out that it claimed to bring clarity and uniformity in the application of Section 44AE of the Act specifically for vehicles where the standard gross weight rule might lead to ambiguity. The CBDT Circular was referred to noting that sub-clause(i) of Section 44AE refers both to the gross vehicle weight or unladen weightof a HGVas the case may be and while the GVW and Unladen weight definition was borrowed from the Motor Vehicles Act,1988, the definition of HGV in the section was not borrowed from the Motor Vehicles Act 1988. Therefore, the applicability of the gross vehicle weight or unladen weight was not clear as to in which situation. The Ld. CIT(A) noted that the Motor Vehicles Act 1988 defined HGV in Section 2(16) to mean any goods carrying vehicle gross weight of which exceeded 12000 kilograms or a tractor or a road-roller the unladen weight of which exceeded 12000 kilograms. Noting this, the Ld. CIT(A) found that the concept of unladen weight in the Motor Vehicle Act was attached to tractor and road-roller and therefore he referred to the CBDT Circular as above which clarified where the gross vehicle weight would apply , bringing it in parity with the definition in the Motor Vehicles Act 1988 stating that for HGVs whose gross vehicle weight exceeded 12000kgs, the profits would be at the rate of Rs.1000 per ton of gross vehicle weight for every month or part of the month and in respect of tractor or trolleys where unladen weight exceeded 12000kgs, the profits would be computed as per Section 44AE(2) sub-clause (i) of the Act at the rate of Rs.1000 per ton of the unladen weight. His findings in this regard are contained at para 5.5 of the order:-
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5.5 On analyzing the definition of “Heavy Goods Vehicle” & “Unladen Weight in both the relevant Act, it is seen that the concept of unladen weight in the motor vehicle Act is attached with Tractor, road roller. In this regard, CBDT issued a circular vide F. No. 225/233/2019/ITA-II Dated 14.08.2019 aimed to bring more clarity and uniformity in the application of Section 44AE, especially for vehicles where the standard GVW rule might lead to ambiguity. The CBDT clarified that-
i. In respect of a “heavy goods vehicle” e all goods carriage vehicle whose gross vehicle weight exceeding 12,000 Kg, the profits and gains from each goods carriage shall be at the rate of Rs. 1,000/- per ton of gross vehicle weight for every month or part of the month.
ii. In respect of a tractor or a road-roller (where the gross vehicle weight is not applicable), if unladen weight exceeds 12,000 Kg, the profits and gains from each goods carriage for the purposes of section 44AE of the Act shall be at the rate of Rs.1000/- per ton of unladen weight for every month or part of the month”.
….
13. Thus noticing the provisions of the Act read with the Motor Vehicles Act 1988 and with the CBDT Circular, the ld. CIT(A) found that the concept of determining HGVs on the basis of gross vehicle weight would apply to goods carriages other than the tractors or road-rollers to whom the determination of HGVs was based on the unladen weight of the vehicle exceeding 12000kgs.
14. Before us, ld. Counsel for the assessee does not dispute this position of law. Therefore, what remains to be seen is under what category the vehicle employed by the assessee qualified. Whether it is a HGV whose gross vehicle weight exceeded 12000kgs or a road-roller or tractor whose unladen weight exceeded 12000kgs.
15. The findings of the authorities below is that the assessee had engaged 5 vehicles having model name TATA SIGNA 4923 and as per the details available on the website www.vahan.nic.in the said vehicles are HGV the gross weight of per vehicle is 49 tonn.
16. Ld. Counsel for the assessee does not deny the fact as above. His contentions however is that the gross vehicle weight as per the registration certificate ought to have been taken for consideration which it mentioned the unladen weight of the vehicle to be 10,200 kgs which is below the prescribed 12 ton threshold limit thereby making it notliable to qualify as HGV u/s 44AE(2)(ii) of the Act. This contention of both the sides are reproduced at para 5.6 of the ld. CIT(A)s order as under:
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5.6 Now coming to the facts of this case, the appellant has engaged 5 vehicles having model name TATA SIGNA 4923 during the year under consideration As per the details available on the website www.vahan nic in, the said vehicles are heavy goods vehicle and gross weight of per vehicle is 49 tonn. The appellant has submitted that the AO has erroneously classified the vehicle as a heavy goods vehicle based solely on its laden weight of 49.000 kg, as obtained from the Ministry of Road Transport & Highways website (https://vahan.nic.in), without considering its unladen weight of 10,200 kg. As per appellant, the correct method of classification should be based on the GVW as per the registration certificate The unladen weight of the vehicle is 10,200 kg, which is below the prescribed 12-ton threshold, thereby making it eligible to be classified as a heavy goods vehicle under Section 44AE(2)(ii) of the Act.
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17. Before us also ld. Counsel for the assessee reiterated the same contention that the unladen weight in registration certificate ought to have been considered and not gross vehicle weight as obtained from the website of the Ministry of Road Transport and Highways. The contention of the ld. Counsel for the assessee in writing areas under;-
3. Erroneous Classification by the AO
3.1 Incorrect reliance on laden weight: In the present case, the AO has erroneously classified the vehicle as a heavy goods vehicle based solely on its laden weight of 49,000 kg, as obtained from the Ministry of Road Transport & Highways website (https://vahan.nic.in), without considering its unladen weight of 10,200 kg. This approach is incorrect and inconsistent with the statutory framework.
3.2 Correct Basis for Classification: GVW as per Registration Certificate: The correct method of classification should be based on the GVW as per the registration certificate and not on either the laden weight or the unladen weight alone. The AO’s approach overlooks the crucial distinction between different weight parameters, leading to an incorrect assessment. The unladen weight of the vehicle is 10,200 kg, which is below the prescribed 12-ton threshold, thereby making it ineligible to be classified as a heavy goods vehicle under Section 44AE(2)(ii).
Since the vehicle’s GVW does not exceed the 12-ton threshold as per the legal definition, the assessee is entitled to avail the benefits of the presumptive taxation scheme under Section 44AE. The AO’s misinterpretation of the laden weight as the basisfor classification is contrary to the statutory provisions and well-established judicial precedents.
18. We do not find any merit in the contention of the ld. Counsel for the assessee. The ld. Counsel for the assessee does not dispute the fact that as per law for the purposes of determining whether the vehicle used by the assessee qualifies as a HGV for the provisions of Section 44AE(2)(i) of the Act to be applicable, the unladen weight of the vehicle is to be considered only if the vehicle is qualified as a tractor or road-roller.
19. Before us, ld. Counsel for the assessee has not demonstrated that its vehicle qualified as a tractor or road-roller. His only contention is that the unladen weight as per the registration certification ought to have been taken. When it is not disputed that the unladen weight of a vehicle is to be considered for determining whether it qualifies as a HGV only in the case of tractors or road-rollers we fail to understand that when the fact of vehicle being a tractor or road-roller has not been demonstrated before us or the Revenue nor is it the case of the assessee that its vehicle qualified as a tractor or road-roller ,then how the unladen weight is to be considered. When the ld. Counsel for the assessee himself stated the fact that for vehicles other than tractors or road-rollers the gross vehicle weight is to be taken for determining whether it qualifies as a HGV and it not being the case of the assessee that its vehicle was a tractor or road-roller, there remains no question therefore of considering the unladen weight for determining whether the vehicle used by the assessee qualified as a HGV or not .The gross vehicle weight admittedly exceeding 12000kgs limit specified in Section 44AE(2)(i) of the Act, there is no doubt , we hold, that the vehicles employed by the assessee qualified as HGV and the provisions of Section 44AE(2)(i) of the Act would apply for determining the presumptive income of the assessee in the present case.
20. In the written submissions filed before us, ld. Counsel for the assessee has himself brought out the distinction between the unladen weight and the gross vehicle weight at para 2.3 of his submissions as under:-
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2.3 Weight parameters and their significance: To correctly classify a vehicle under Section 44AE, it is important to differentiate between the various weight parameters:
• Unladen Weight: The weight of the vehicle without any goods or passengers.
• Laden Weight: The total weight of the vehicle when fully loaded.
• Gross Vehicle Weight (GVW): The total permissible weight, including the maximum load allowed by the registration authority.
21. Having brought out this distinction, ld. Counsel for the assessee has submitted that for a vehicle to be qualified as HGV u/s 44AE of the Act its gross vehicle weight must exceed 12000kgs as per registration certificate. There is no dispute with regards to the same. However, the ld. Counsel for the assessee has gone on to state that since the unladen weight of the vehicle in question only 10,200 kgs the assessee applied the provisions of Section 44AE(2)(ii) of the Act for the computation of the profits.
22. When the Ld. Counsel for the assessee himself understands the distinction between gross vehicle weight and unladen weight and is aware of the position of law that gross vehicle weight is to be considered for determining whether the vehicle qualifies as HGV if it is vehicle other than tractor or road-roller, then we fail to understand how the ld. Counsel for the assessee in the same breathe is saying that in his case the unladen weight as per the registration certificate ought to be considered when it is not his case that the vehicle used by him either qualified as tractor or road-roller.
23. Ld. Counsel for the assessee has relied on the decision of judicial authorities in its favour which are as under:-
- CIT Vs. Y Subhash Reddy [2016] 386 ITR 144 (Telangana & Andhra Pradesh HC)
- DCIT v G Satyanarayana (2017) 82 taxmann.com 191(Vishakhapatnam ITAT)
- ITO Vs. K.K. Harnath Singh [2009] 27 SOT 61 (Delhi ITAT)
24. Copies of the above orders were not placed before us. However the copy of the orders were accessed through google and we find that there were no said cases with reference to the citations given by the ld. Counsel for the assessee before us.
25. In the case of Y Subhash Reddy (Supra) the citation 386 ITR 144 is in relation to a decision of the Hon’ble Calcutta High court in the case of CONTAI CO-OPERATIVE BANK LTD. vs ACIT. The other citations were also not accessible on any platform.
26. All the arguments raised by the ld. Counsel for the assessee are therefore dismissed.
27. The order of the Ld. CIT(A) is confirmed.
28. In effect, therefore we hold that in the facts of the present case, the profits of the assessee were correctly determined by the AO by applying Section 44AE(2)(i) of the Act.
29. In effect, appeal of the assessee is dismissed.
Order pronounced in the Open Court on 29.10.2026
