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How to treat the hire charge income from hitachi proclainer

ARYAN (C.A. FINAL STUDENT) (39 Points)

16 March 2015

how to account for the income derived as hire charges from Hitachi /JCB (i.e. proclainer Machines) in the financial year 2014-15, wheather will it be considered as an heavy vehicle goods carriage vehicles & sec. 44AE will be applicable.......??? or waht.

please give me your valuable suggestions

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2 Replies

CA Raj Doshi (Practising CA) (8799 Points)
Replied 17 March 2015

1. 44AE is for transport of goods. Here , there is not transport of goods. So 44AE not applicable. 2. It is hiring income. It can be shown under 44AD in presumptive taxation subject to other conditions , by filing ITR-4S. 3. Or you can file ITR-4.

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Vishal Goel (Chartered Accountant) (1688 Points)
Replied 17 March 2015

Hello,

Section 44AE is applicable for goods carriages. Earthmoving machinery(JCB) is meant for excavation of earth, lifting of heavy materials etc. Though it is registered under the Motor Vehicles Act, 1988 it cannot be construed as goods carriage vehicle.

In Gaylord Constructions v. ITO (2009) 175 Taxman 99 (Mag.) (Cochin)(Trib) it was held that the earthmoving machinery is not covered by the provisions of section 44AE. The tribunal took in aid the Circular No.684 dated 06-03-1994 and held that section 44AE could not be applied for computing and adopting presumptive income from the earth moving machinery.