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of <h1>Tribunal allows deductions for hired goods carriages, favors assessee on truck expenses, labor charges.</h1> <h3>Shakir Ahmad Versus ITO, Ward-2 (3), Meerut</h3> Shakir Ahmad Versus ITO, Ward-2 (3), Meerut - TMI Issues Involved:1. Disallowance of truck maintenance expenses.2. Disallowance of salary paid to the driver and conductor.3. Disallowance of labor charges.4. Addition out of truck hire charges.5. Addition out of labor charges.6. Levy of interest under sections 234A, 234B, 234D, 244(A)(3), and 220(2) of the Income Tax Act.Detailed Analysis:1. Disallowance of Truck Maintenance Expenses:The assessee contested the disallowance of Rs. 159,580/- made by the Assessing Officer (AO) and sustained by the Commissioner of Income Tax (Appeals) [CIT(A)]. The AO in his remand report accepted that details with supporting bills and vouchers were filed by the assessee. The AO suggested that Rs. 50,000/- of the disallowed amount might be deleted. However, the CIT(A) did not provide satisfactory comments for the remaining disallowance of Rs. 109,580/-. The Tribunal found that the details and reasonableness of the expenditure were explained satisfactorily, thus deleting the entire disallowance of Rs. 159,580/-.2. Disallowance of Salary Paid to Driver and Conductor:The disallowance of Rs. 18,750/- was contested on the grounds that the salary was paid for the full month of November, although the work was done only for part of the month. The Tribunal noted that the assessee conducted 32 trips in November, justifying the full month's salary payment. Consequently, the Tribunal deleted the disallowance.3. Disallowance of Labor Charges:The assessee challenged the disallowance of Rs. 30,650/- and Rs. 241,570/- on labor charges. The Tribunal found that the labor charges were business expenditures, incurred as per the details furnished. The AO had presumed without sufficient reasoning that labor charges were paid by the mill. The Tribunal concluded that both additions made by the AO were incorrect and deleted them.4. Addition out of Truck Hire Charges:The AO disallowed 50% of the truck hire charges amounting to Rs. 73,410/-, presuming no work was done in May. The Tribunal found that the assessee had rendered contractual works in May and correctly accounted for the payment of Rs. 146,821/-. The disallowance of Rs. 73,410/- was deemed incorrect and was deleted.5. Addition out of Labor Charges:Similar to the previous issue, the Tribunal found the disallowance of Rs. 241,570/- for labor charges to be unjustified. The labor charges were necessary for setting sugarcane on the truck, and the AO's presumption that these charges were paid by the mill was incorrect. The Tribunal deleted the disallowance.6. Levy of Interest under Sections 234A, 234B, 234D, 244(A)(3), and 220(2):The assessee argued against the levy of interest under these sections. The Tribunal noted that this issue is consequential in nature and does not require separate adjudication. Therefore, the ground was dismissed.Conclusion:The Tribunal allowed the appeal of the assessee partly, directing the AO to provide deductions for expenditures related to goods carriages not owned by the assessee but hired from the open market. Ground Nos. 2, 3, 4, and 5 were allowed in favor of the assessee, while Ground Nos. 1 and 6 were dismissed. The order was pronounced in the open court on 12th October 2022.
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