INCOME IN CASE OF ASSEESSEE ENGAGED IN THE BUSINESS OF PLYING , HIRING OR LEASING OF GOODS CARRIAGES
Applicability : This section applies to all types of assesses whether resident or non-resident who are engaged in the business of plying , Hiring or leasing of goods carriages and owns not more than 10 goods carriages at any time during the financial year. Here the important point that is to be noted Is that the ownership of the good carriages should be of the assessees.Goods taken on hire purchase or on installments will be treated to be owned by the assessee even if the installments is outstanding partly or wholly. Here no bifurcation made between heavy and light good carriage.
MEANING OF GOOD CARRIAGE :
It means any motor vehicle which has been constructed for the purpose carriage of goods or any motor vehicle which has not been prepared for goods carriage but is used for such purpose.
JCB machine used for the purpose excavation of earth or lifting of heavy vehicle is not treated as good carriage and thus its income cannot be computed under Sec 44AE.
In respect of the assessee on whom the Sec 44AE is applicable , income will be calculated straight forward @ Rs. 7500.00 per month or part of month per good carriage in respect of each good carriage for the period during which the good carriage was owned by the assessee during the year under consideration. It is to be noted that the period for the income calculation will be taken from the month in which the asset is purchased not from the month in which the good carriage was put to use. However in case the assessee is earning higher income than the income specified under this section then he can claim higher income.
In case of income is declared @ Rs, 7500.00, then in that case no additional deductions will be allowed under this section. This income will be considered as the net income earned after writing of all expenses including depreciation. However if the assessee under consideration is a partnership firm then from such income the interest or remuneration paid to partners can be deducted.
Note : The assessee who is declaring income under section 44AE is required to apply such provisions in respect of all the goods carriages . He is not allowed to apply provisions of Sec 44AE in case of some lorries and to go for the regular assessment in respect of remaining lorries.
Relaxation allowed to the assessee covered u/s 44AE
The assessee covered u/s 44AE and declares income equal to or more than the income specied u/s 44AE will get following relaxations under the income tax act:-
Lower declaration of income :
The assessee covered under this section can declare lower income then the income specified under this section , but in that case the assessee will be required to maintain books of accounts as required u/s 44AA irrespective of the turnover as well as the assessee will be required to get his accounts audited u/s 44AD if the income of the assessee exceeds the exemption limit.
In other words, the assessee covered u/s 44AE and declaring income lower than the income specified under this section will be compulsorily maintaining the books of accounts and will be required to get his accounts audited by a chartered accountant as required under section 44AB irrespective of the turnover of the assessee during the year under assessment.
In case of 44AD of the income tax act it is provided that the assessee covered under 44AD will be required to get his accounts audited under section 44AB if he declares lower income than specified under than section and the declared income exceeds the maximum amount which is not chargeable to tax
However assessee covered u/s 44AE is required to get his accounts audited in case the assessee declares lower income than the income specified under section 44AE. Here the amount of income declared is more than the exemption limit or lower than that will not be consideration for applicability of Sec 44AB.