2026 (4) TMI 183 - AT - Income Tax

Carting expenses disallowance failed where separate invoices and vouchers showed transportation charges were billed independently of purchases.

Carting expenses were held allowable where the assessee showed, through separate invoices, debit notes and vouchers, that transportation charges were ... Disallowance based on presumption of double claim - carting expenses - presumption of double debit of single expenses - Out of the carting expenses part amount related to transportation charges of cement HELD THAT: - The Tribunal found from the record that the assessee had consistently maintained that transportation charges were raised by the cement suppliers through separate debit notes or invoices distinct from the purchase invoices, and had also produced sample invoices, debit notes and accounting vouchers to show that the amount recorded under purchases did not include the carting component. Assessee's detailed reply with supporting documents had not been dealt with either in the assessment order or in the appellate order. Since the disallowance rested on a mere presumption of double claim without examination of the material placed on record, the conclusion of the lower authorities stood vitiated. [Paras 7] The addition made by disallowing the carting expenses was deleted and the assessee's appeal was allowed. Final Conclusion: The Tribunal held that the impugned disallowance could not be sustained because the authorities below had ignored the assessee's reply and evidentiary material showing separate billing and accounting of carting charges. The appeal was accordingly allowed. Issues: Whether the disallowance of carting expenses on the footing of double debit was justified when the assessee produced separate invoices, debit notes, and vouchers showing that transportation charges were separately billed and paid to cement suppliers.Analysis: The assessee consistently maintained that the carting charges were separately invoiced by the cement suppliers through debit notes and were not included in the purchase value recorded under purchases. Sample invoices, debit notes, and accounting vouchers were placed on record to support this stand. The detailed reply dated 10.04.2021 and the supporting material were not dealt with in the assessment order or the appellate order. Where relevant submissions and evidence are ignored, the foundation of the disallowance cannot be sustained.Conclusion: The disallowance of carting expenses was not justified and was deleted in favour of the assessee.