Tribunal remands transportation expenses issue, upholds part disallowance, and reduces telephone expenses disallowance.

The Tribunal partially allowed the appeal, remanding the transportation expenses issue back to the CIT(A) for reconsideration. The disallowance of transportation expenses was partly upheld, with expenses paid to three transporters disallowed but Rs. 2,39,802/- allowed for services confirmed by one transporter. Regarding telephone expenses, the initial disallowance of Rs. 14,316/- was reduced to 10% of the claimed amount by the Tribunal due to lack of bills/vouchers, finding the original disallowance excessive.

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Issues:
1. Disallowance of transportation expenses
2. Disallowance of telephone expenses

Disallowance of Transportation Expenses:
The appeal was against the disallowance of transportation expenses by the Assessing Officer (AO). The AO disallowed Rs. 20,59,480/- of transportation expenses based on the unavailability of the transporters at the given addresses. The assessee contended that it provided manpower services and paid extra for transportation, submitting supporting documents. The AO rejected the explanation, citing non-traceability of transporters and past disallowances. The CIT(A) partly allowed the appeal, disallowing expenses paid to three transporters but allowing Rs. 2,39,802/- for services confirmed by one transporter. The Tribunal referred to a previous order and remanded the issue back to the CIT(A) for fresh consideration, following the same direction.

Disallowance of Telephone Expenses:
The AO disallowed Rs. 14,316/- out of Rs. 71,578/- claimed as telephone expenses due to cash payments without bills/vouchers. The CIT(A) upheld the disallowance. The Tribunal, considering the lack of bills/vouchers, reduced the disallowance to 10% of the expenses, finding the initial disallowance excessive.

In conclusion, the Tribunal partially allowed the appeal on both issues, remanding the transportation expenses matter back to the CIT(A) for reconsideration and reducing the disallowance of telephone expenses from 20% to 10%.

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