TaxTMI 
TaxTMI 
2010 (7) TMI 1049
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....i Ravindra M. Shah 02. 2768 and 2769/A/02 AY 1998-99 & 1999-2000 08-08-2008 Shri Ravindra M. Shah 3. On ground No.1 the assessee challenged the disallowance on account of carting expenses restricted to 1% and the Revenue on ground No.1 challenged the order of the learned CIT(A) in restricting the disallowance out of carting expenses to 1% from 2.5% of half of these expenses disallowed by the AO. 4. Briefly, facts of the case are that the AO disallowed carting expenses of Rs. 8,94,772/-. The AO discussed this issue in Para 4 of the assessment order. It was noticed by the AO that ratio of the carting expenses to the carting receipts this year was 82.96% and on further scrutiny of the details of carting expenses of Rs. 11,06, 01,826/-, a sum of Rs. 9,17,66,249/- had been paid to the transporters and single operators other than sister concern of the assessee. It was further noticed by the AO that certain vouchers are self made and are not supported by bills. Even addresses and identity of the drivers were not established. It was also noticed that as compared to assessment years 2001-02 and 2000-01 such incidents of lack of supporting bills has increased this....
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.... AO and submitted that assessee's Counsel submitted before the learned CIT(A) to follow his appellate order for preceding assessment year and requested that disallowance may be restricted to 1% and balance may be deleted. The learned DR, therefore, submitted that appeal of the assessee is not maintainable and is liable to be dismissed because the learned CIT(A) accepted the contention of the assessee to that extent. The learned DR in departmental appeal submitted that the AO has pointed out specific defects in bills and vouchers and that here was self made vouchers and that some of the vouchers were not supported by bills and other evidence. Even the identity and addresses of the drivers have not been established. He has submitted that since the AO has considered previous history of the assessee and also noted that there is a decrease of the incidents of lack of bills in the assessment year under appeal, therefore, the AO has taken a reasonable view for making the disallowance. He has submitted that the AO has also considered the expenses paid to the sister concern but no adverse view is taken. He has relied upon PB -140 which is audit report in which it is specifically mentioned t....
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....ct". 6.1 The statement of fact and observation noted by the learned CIT(A) in the appellate order shows that the learned Counsel made a statement before the learned CIT(A) that addition may be restricted to 1% of the addition made by the AO. Therefore, the assessee cannot be permitted to assail the above finding of the learned CIT(A) unless some steps have been taken in the matter. It is not open to the assessee at this stage after a lapse of considerable period that the finding of fact by learned CIT(A) was incorrect or was not based upon the contention of the assessee's Counsel. 7. Considering the facts of the case and the findings noted by the AO that some of the bills of carting expenses were only supported by some self made vouchers and some of the bills were not supported by other evidence and even the identity of the drivers were not established by the assessee would show that the record maintained by assessee the of carting expenses was not reliable. ITAT Ahmedabad Bench in the case of the assessee in assessment year 2003-04 in ITA No.2254 and 2256/Ahd/2007 (supra) in Para 3.5 to 3.8 held as under: "3.5 Before us, Learned Authorised Representative of the asse....
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.... background as well as the principle laid down by the respected Co-ordinate Bench, wherein Revenue's appeals were dismissed, therefore, we hereby follow the said view and direct the Assessing Officer to allow the claim as per law. 3.8. In the result, Revenue's ground is hereby dismissed, whereas Assessee's ground No.1 is allowed". 8. The Tribunal considering the earlier years finding of fact recorded by the Tribunal in which it was specifically noted that the AO has not pointed out any inflation in the figures in the books of account and that assessee maintained complete details and vouchers, therefore, in these premises, the Tribunal followed the order of the various benches and deleted the addition. However, as noted above, the facts of this case are clearly distinguishable because the AO has pointed out specific defects in the maintenance of books of account and that learned CIT(A) has specifically noted that the defects pointed out by the AO have not been rebutted by the assessee would show that the details of carting expenses maintained by the assessee were not reliable. However, considering the order of the Tribunal in earlier years it would be reasonable and just....
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....the matter, this ground of appeal of the assessee is dismissed. 14. On ground No.3, the assessee challenged the disallowance of 10% out of telephone expenses and depreciation amounting to Rs. 42,309/-. It was noticed by the AO that the assessee was having only one vehicle at its disposal and personal user of the same is not ruled out. 10% of the total expenses were accordingly disallowed. It was submitted that the vehicle is mainly used for business purposes and if any addition is to be made the same may be restricted to reasonable sum. The learned CIT(A) noted that personal user of the vehicle is not ruled out and that in assessment year 2000-01 disallowance out of vehicle expenses and depreciation was considered and in assessment year 2001-02, 10% was disallowed on the same issue by considering past records of the assessee. 15. The learned Counsel for the assessee submitted that ITAT Ahmedabad Bench in the case of the same assessee for assessment year 2003-04 in ITA No.2254 and 2256/Ahd/2007 (supra) confirmed the disallowance and dismissed the appeal of the assessee. He has submitted that the issue is therefore, covered against the assessee. 16. On consideration of....
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....pra) we do not find any merit in these grounds of appeal of the assessee. The same are accordingly dismissed. 18. On ground No.6, the assessee challenged the disallowance of bad debt of Rs. 3,30,301/-.The AO asked the assessee to furnish documentary evidence in respect of efforts made to realize the debts and as to how the conditions laid down in the Act are fulfilled. The assessee however, could not furnish any documentary evidence and could not prove that there was no hope of recovery of the debts. The AO accordingly disallowed the bad debts. It was submitted before the learned CIT(A) that there were outstanding amounts in the books of account on account of transportation charges for services rendered to various companies and the debts were written off when the debts remained outstanding for a period of more than 2 /3 years. The assessee relied upon amended provisions of section 36(1) (viii) of the IT Act. The learned CIT(A) however, confirmed the addition on the reasons given by the AO. The learned CIT(A) noted that what was written off was debts and not bad debts and that no evidence has been filed as to what efforts were made for recovery of the amount in question. The lear....