Vehicle maintenance disallowance cannot rest on prior-year findings without fresh verification and hearing

Disallowance of vehicle maintenance expenditure restricted to 20 per cent was found unsustainable because the Tribunal had relied on an earlier year's order without independently examining the relevant material for the year in question. The earlier order had only remitted the matter for verification of expenditure details and allowance of the claim in accordance with law. The matter was therefore required to be reconsidered on the facts of the present year after giving the assessee an opportunity of being heard.

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Issues: Whether the disallowance of vehicle maintenance expenditure by restricting it to 20 per cent was sustainable.

Analysis: The Tribunal had sustained the disallowance by following an earlier order in the assessee's own case. That earlier order had, however, remitted the matter for verification of the expenditure details and for allowance of the claim in accordance with law. The impugned order was therefore not supported by an independent consideration of the relevant material in the present year.

Conclusion: The restriction of disallowance to 20 per cent could not be sustained and the matter was required to be reconsidered after giving the assessee an opportunity of being heard.

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