2016 (5) TMI 1581 - AT - Income Tax

Tribunal upholds CIT(A) decision on truck hire charges disallowance, citing lack of evidence.

Assistant Commissioner of Income Tax Versus Shyam Sundar Agarwal

The Tribunal dismissed the Revenue's appeal and upheld the decision of the CIT(Appeals) to delete the disallowance of truck hire charges. The Tribunal ... Disallowance on account of Truck hire charges - expenditure incurred by the assessee on payment of truck hire charges was not fully verifiable - CIT-A deleted the addition - HELD THAT:- No specific or material defects were pointed out by the Assessing Officer in the vouchers maintained by the assessee in support of his claim for truck hire charges except that the said vouchers were self-made vouchers and the truck hire charges were paid by the assessee in cash. Keeping in view the nature of the business of the assessee, there was nothing unusual in making the payment of truck hire charges in cash through self-made vouchers so as to doubt the genuineness of the expenditure incurred by the assessee on truck hire charges. In the case of Ranjit Singh Prem Singh Ahuja [2015 (7) TMI 152 - ITAT PUNE] a similar issue had come up for consideration before the Pune Bench of this Tribunal and the disallowance of 2% of transport expenses made by the Assessing Officer by raising trivial objection was held to be not sustainable by the Tribunal on the ground that no material discrepancy whatsoever had been pointed out by the Assessing Officer in the books of account and other record maintained by the assessee in support of its claim for transport expenses. Ad hoc disallowance made by the Assessing Officer out of truck hire charges was not sustainable and the ld. CIT(Appeals) is fully justified in deleting the same - Decided against revenue. Issues: Disallowance of truck hire charges by Assessing OfficerAnalysis:1. Issue of Disallowance: The appeal was filed by the Revenue against the order of the Commissioner of Income Tax-(Appeals) where the disallowance of Rs.30,00,000/- on account of Truck hire charges was deleted for the assessment year 2008-09.2. Assessee's Claim: The assessee, engaged in transportation business, filed a return declaring total income and claimed expenditure on truck hire charges. The Assessing Officer found shortcomings in the verification of expenses incurred under this head, leading to the disallowance.3. CIT(Appeals Decision: The CIT(Appeals) deleted the disallowance citing that Forms 15-I & 15-J were submitted with truck owners' addresses, and no adverse comments were found in the books of accounts. The CIT(Appeals) also referred to a similar decision by ITAT Kolkata in another case.4. Tribunal's Analysis: The Tribunal noted that relevant information about truck owners was available in forms submitted by the assessee, and no verification was done by the Assessing Officer. The Tribunal found no specific defects in vouchers supporting the claim. Referring to a similar case, the Tribunal held the ad hoc disallowance without basis was not sustainable, upholding the CIT(Appeals) decision to delete the disallowance.5. Decision: The Tribunal dismissed the Revenue's appeal, supporting the CIT(Appeals)'s decision to delete the disallowance of truck hire charges. The Tribunal emphasized the lack of material discrepancies and the absence of a basis for the disallowance, aligning with the decision in a similar case before the Pune Bench of the Tribunal.In conclusion, the Tribunal upheld the decision to delete the disallowance of truck hire charges, emphasizing the importance of proper verification and the absence of material discrepancies to support such disallowance.