Tax Query

Dear Sir,

Sec 44AE is attracted in case of owned trucks,  I think in this case, assesee has two options -

1) If presumptive Income is LESS then the actual Income

Owned trucks - Compute u/s 44AD & Hired Trucks - Compute in a usual way

In this case Sec 44AA / 44AB has to be seen only in respect of Hired Truck

2)  If presumptive Income is MORE then the actual Income

Income from hired trucks as well as owned trucks can be computed in a usual way

In this case 44AA & 44AB shall apply in respect of both kinds of trucks

Depreciation on owned trucks can be claimed under this option i:e where Income is computed in a usual way.

Sir, i will suggest that you show the business in different trade name which apply that a) for owned trucks 44AE will be applied and  b) for hired truck normal provision will apply.

Regards

Piyush

Hi Piyush,

The pbm is company doen not accept bills in 2 different names. So, the payment received from the company is in the same name.

Hey Amir,

The issue is that all the payments get deposited in bank through checks, whether it is for owned trucks or hired and all the payments for one month a received in a single check.

So, do i bifurcate those receipts and only include in my books of accounts those for hired trucks.

That would mis match my receipts as per bank statements and also the bank balances won't tally as per my books.

And if i apply the second option given by you, then do i have to maintain all the bills like deisel, toll receipts and other charges for owned trucks.

Then, i suppose i will be able to claim depreciation on owned trucks ?

Dear Sir,

In books you will be recording entire receipts i:e in respect of both kinds of trucks,  only thing is u just have to segregate ur Receipts & Expenses...

Receipts can be segregated -I dont think there is an issue.

Problem is Expenses of common nature like "Electricity, Stationary, etc" - Tough to say the treatment - and Safest approach will be to claim only those expenses which are exclusively for "Hired Trucks"..

In which ratio common expenses should be be claimed - Well this question will be answered by AO only.

I am not sure but think that apportionment on some logical base would do like "In proportion to receipts from both kinds of trucks" etc.

Originally posted by : Naresh Kothari
	Hello, My client has a transportation business. He has entered into contracts with companies to provide vehicles to them as needed. The proprietor also has trucks in his own name (Less than 10) which he uses for this purpose and also hires vehicles from the market on daily basis. His total turnover goes above 40 lacs. My query was whether sec 44AE will be applicable in this case for his own vehicles and prepare P&L for the reamining business where he hires vehicles from the market  or he shall claim depreciation on his own vehicles as well and include the entire turnover in his P&L. Please suggest

hi, naresh ji: my opinion in case of u r ques. is that u can make difference b/w the business rec. and personal rec. 

and u r liable to make business p&l only in case u r business rec. is above 40 lac, and may i remind u that depreciation which u going to charge in on the wdv of the assets as reduce from the date of original put to use till now 

Dear Nareshji,

In ur case If Assesse is doing the business in different name and showing the His own truck income separatly and Income of Hired Truck Differentlr then he can get the benefit of Sec.44AAe. If Assesee is issuing the bill of his own truck and hired truck in same trade name and his Turnover exceeds Rs,40 lakhs then I think He can not eligible for sec.44AE.