Tribunal adjusts disallowance rate for expenses, denies depreciation claim on motor cycles. Appeal partially allowed.

The Tribunal reduced the disallowance percentage for carriage inward expenditure to 5% and upheld the disallowance of depreciation on motor cycles due to lack of supporting evidence. The appeal was partly allowed, and the decision was pronounced on 18th March 2016.

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Issues: Disallowance of carriage inward expenditure and disallowance of depreciation on motor cycles.

Issue 1: Disallowance of Carriage Inward Expenditure
The appellant, a partnership firm engaged in fertilizer trading, filed its return for the assessment year 2009-10, declaring total income. The Assessing Officer disallowed 10% of the claimed expenditure towards freight and carriage outwards due to lack of supporting evidence. The appellant produced way bills but failed to provide evidence for the quantum of expenditure or the payees' addresses. The CIT(A) upheld the disallowance, citing insufficient details. The appellant contended that the disallowance was adhoc and excessive. The Tribunal noted the nature of the appellant's business and reduced the disallowance to 5%, considering the turnover and business size. The Tribunal directed the Assessing Officer to disallow 5% of the expenditure under the head carriage inwards.

Issue 2: Disallowance of Depreciation on Motor Cycles
The Assessing Officer disallowed depreciation claimed on two motor cycles due to the absence of bills and vouchers. The appellant stated that the invoices were available but not submitted due to oversight. The CIT(A) upheld the disallowance, noting the lack of evidence even during the appellate proceedings. The Tribunal agreed with the CIT(A) and upheld the disallowance, as the appellant failed to provide supporting bills for the expenditure claimed. The appeal was partly allowed, confirming the disallowance of depreciation on the motor cycles.

In conclusion, the Tribunal addressed the issues of disallowance of carriage inward expenditure and depreciation on motor cycles. The Tribunal reduced the disallowance percentage for carriage inward expenditure and upheld the disallowance of depreciation on motor cycles due to the lack of supporting evidence. The appeal was partly allowed, and the decision was pronounced on 18th March 2016.

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