Appeal partly allowed for statistical review, with specific reassessment directions on financial charges & expenses.

The appeal was partly allowed for statistical purposes, with specific directions given for reassessment on the disallowance of financial charges for non-deduction of tax under section 40(a)(ia) and truck running and transportation expenses. The tribunal upheld the CIT(A)'s decision on the adhoc disallowance of various expenses, confirming the disallowance.

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Issues:
1. Disallowance of financial charges for non-deduction of tax under section 40(a)(ia)
2. Disallowance of truck running and transportation expenses
3. Adhoc disallowance of expenses

Analysis:
1. The appeal was against the CIT(A)'s order for the assessment year 2010-2011. The assessee contested the disallowance of Rs.21,86,031 under section 40(a)(ia) for not deducting tax from financial charges paid to certain entities. The appellant argued that the CIT(A) erred in not considering the retrospective effect of the proviso inserted by the Finance Act 2012. The tribunal remitted this issue to the Assessing Officer for verification based on the CA certificate provided by the assessee.

2. Regarding the disallowance of truck running and transportation expenses, the Assessing Officer had made an adhoc disallowance of Rs.8,00,000 due to missing vouchers and poor record management. The appellant contended that they maintained proper accounts and had genuine vouchers. The tribunal directed the Assessing Officer to review the issue with detailed submissions from the assessee.

3. The adhoc disallowance of Rs.1,39,904 out of various expenses was also challenged. The tribunal upheld the CIT(A)'s decision on this issue, confirming the disallowance. The appeal was partly allowed for statistical purposes, with specific directions given for reassessment on the first two issues and confirmation of the third issue.

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