Tribunal grants relief in appeal, remands for verification on depreciation. Disallowance under (3) upheld, non-deduction stands.

The Tribunal partly allowed the appeal, remanding the case to the CIT(A) for further verification regarding the depreciation claim. Relief was granted for the disallowance under Section 40A(3) due to a genuine mistake in payment mode, while the disallowance for non-deduction of TDS was upheld. The issues of levying interest under Section 234B/C and initiating penalty proceedings under Section 271(1)(c) were not extensively addressed, indicating they were not primary grounds of appeal.

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Issues Involved:
1. Disallowance of depreciation and RTO expenses.
2. Addition under section 40A(3) of the Income Tax Act, 1961.
3. Disallowance for non-deduction of TDS from payments made to transporters.
4. Levying interest under section 234B/C of the Act.
5. Initiating penalty proceedings under section 271(1)(c) of the Act.

Issue-wise Detailed Analysis:

1. Disallowance of Depreciation and RTO Expenses:
The assessee claimed depreciation on certain vehicles not registered in its name. The Assessing Officer (AO) disallowed this claim, arguing that the assessee failed to prove dominion over these assets and their use for business purposes. The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the AO's decision, noting the absence of evidence linking the vehicles to the company's business and the lack of documentation proving the vehicles' expenses were borne by the company. The Tribunal, however, cited precedents where companies were allowed depreciation on assets registered in directors' names but used for business purposes. The case was remanded to CIT(A) to verify if the vehicles were funded by the company and if the individuals in whose names the vehicles were registered were directors of the company.

2. Addition under Section 40A(3) of the Income Tax Act, 1961:
The AO disallowed Rs. 6,35,000 paid via bearer cheques to a contractor, invoking Section 40A(3) which mandates payments above a certain threshold to be made through account payee cheques. The CIT(A) confirmed this disallowance, stating that the payments violated the specified mode of payment. The Tribunal, however, noted that the payments were inadvertently made via bearer cheques and credited to the contractor's bank account, with no cash withdrawals involved. Given the genuine nature of the transactions and the bona fide mistake, the Tribunal allowed the assessee's appeal on this ground.

3. Disallowance for Non-deduction of TDS:
The AO disallowed Rs. 2,83,505 due to the assessee's failure to deduct TDS on payments to transporters. The CIT(A) provided partial relief for payments where PANs were submitted but upheld the disallowance for others. The Tribunal found no fault in the CIT(A)'s decision, as the assessee had not furnished PANs for all recipients, thereby violating Section 194C of the Act.

4. Levying Interest under Section 234B/C:
The Tribunal did not provide a detailed analysis for this issue, implying that it was not a primary ground of appeal or was subsumed under other decisions.

5. Initiating Penalty Proceedings under Section 271(1)(c):
Similarly, the Tribunal did not elaborate on this issue, suggesting it was not a focal point of the appeal or was contingent on the outcomes of the primary issues.

Conclusion:
The appeal was partly allowed for statistical purposes, with specific directions to the CIT(A) for further verification on the depreciation claim. The Tribunal provided relief on the disallowance under Section 40A(3) but upheld the disallowance for non-deduction of TDS.

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