TaxTMI 
TaxTMI 
2014 (1) TMI 950
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....CC-2/11-12 and (iv) CIT(A)-IV/259B/CC-2/11-12 passed u/s 153A read with section 143(3) of the Income Tax Act, 1961, challenging the deletion of (i) deletion of the audition made due to disallowance of expenses amounting to Rs.9,23,100/- invoking the provisions of section 40(a) (ia) of the Act for the assessment year 2005-06 (ii) deletion of the addition made for Rs.Rs.47,60,000/- for the assessment year 2007-08, (iii) Rs.21,33,000/- for the assessment year 2008-09 and (iv) Rs.15,00,600/- for the assessment year 2009-10 made due to disallowance of expenses for provisions made for incentives to drivers. 2. Briefly, the facts of the case are that the assessee is a firm engaged in the business of transportation and transport booking contract....
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.... 85300 3 GJ6Y-7483 70600 4 HR38K-7580 94300 5 HR38K-7581 118000 6 HR 38K-7585 70700 7 HR55B-4875 87500 8 HR55B-4880 71400 9 HR55C-2395 92700 10 HR55C-3978 64800 Total 923100 For the above said reason, the learned AO disallowed the total expenditure of Rs.9,23,100/- invoking section 40 (a) (ia) of the Act. 6. On appeal, the learned CIT(A) deleted the addition following the decision in the case of Merilyn Shipping & Transport Vs. ACIT in ITA No.477/Viz/2008 dated 29-03-2012 and observed as under: "8. I have carefully considered the submissions made by the appellant and have gone through the various judicial decisions relied upon by the appellant. ....
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....in the previous year itself and no amount is outstanding which is payable on the last day of the previous year without deduction of tax at source. Accordingl8y disallowance made by the AO u/s 40 (a) (ia) of the IT Act, 1961 is hereby deleted subject to verification by the AO that the above amount of Rs.9,23,100/- has been actually paid by the appellant during the previous year itself. This ground of appeal is allowed subject to verification by the AO." Against this order of the learned CIT(A), the revenue is now in appeal before us. 7. The learned DR argued stating that the decision relied upon by the learned CIT(A) is not more a good law, since the Hon'ble Andhra Pradesh High Court had suspended the order of the Tribunal and the deci....
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....produced herein below for adjudication:- "1. The Ld. CIT(A) has erred in law and on facts in deleting the addition made due to disallowance of expenses of Rs.47,60,000/-for AY 2007-08, Rs.21,33,000/- for AY 2008-09 and Rs.15,00,000/- for AY 2009-10 respectively, which is a provision made for incentives to the Drivers." 10. The learned AO had disallowed the accrued expense debited to the profit & loss account being the incentive due to the truck drivers for all the above stated relevant assessment years for the respective amounts. The assessee had contended that it had received payments from its clients for reimbursement of incentive payments to the truck drivers and the assessee had only disbursed such payments showing it as expense a....
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....of incentives to drivers is a contingent liability and not ascertained liability. The genuineness of such payment made in subsequent year has not been doubted by the AO. Considering the decision of the Hon'ble ITAT in the appellant's own case, it is held that the liability of payment of incentives to drivers is not a contingent liability even though it is discharged at a future date and, therefore, disallowance made by the AO in respect of incentives paid to drivers is hereby deleted subject to verification by the AO that payment of such incentives has actually been made in the subsequent years. This ground of appeal, is accordingly allowed for all the above years subject to verification by the AO. Against these findings of the learned C....