Tribunal Rules in Favor of Appellant on Conveyance Charges & Consultation Fees

The Tribunal ruled in favor of the appellant regarding the disallowance of conveyance charges, determining that the charges were reimbursement, not conveyance allowance, and therefore not subject to disallowance under s. 37(3A). However, the disallowance of entertainment expenses was upheld due to a previous ruling against the appellant. The Tribunal also allowed the appellant's argument against disallowance under s. 80VV, stating that consultation fees were not related to IT proceedings and thus not subject to disallowance under s. 80VV. As a result, the appeal was partially allowed based on these findings.

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Issues: Disallowance of conveyance charges, disallowance of entertainment expenses, disallowance under s. 80VV

Conveyance Charges Disallowance:
The appellant contested the disallowance of 20% of conveyance charges paid to employees, arguing that the charges were reimbursement for expenses incurred while carrying out duties, not conveyance allowance. The Revenue treated the charges as conveyance allowance under s. 37(3A) for disallowance. The Tribunal analyzed the ledger account provided and concluded that the charges were reimbursement, not conveyance allowance, therefore not falling under s. 37(3A). The argument that hiring of taxies would be disallowed was rejected since the company did not hire cars for employees. Consequently, no part of the conveyance charges was deemed disallowable.

Entertainment Expenses Disallowance:
The Tribunal upheld the disallowance of Rs. 27,714 as entertainment expenses, citing a previous ruling against the appellant on the same issue. The appellant did not challenge this decision, leading to confirmation of the CIT(A)'s action on this matter.

Disallowance under s. 80VV:
Regarding the disallowance under s. 80VV, the appellant argued that fees paid for consultation were not related to proceedings before any IT authority, thus not falling under s. 80VV. Citing a precedent, the Tribunal agreed that charges for consultation did not involve appearance in IT proceedings and were outside the scope of s. 80VV. Consequently, the charges were held allowable under s. 37, not subject to disallowance under s. 80VV. The appeal was partially allowed based on these findings.

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