TaxTMI 
TaxTMI 
2016 (5) TMI 1105
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....e decided in this appeal is as to whether, the learned CIT(A) is justified in restricting the disallowance of lorry operational expenses to Rs. 2,50,000/- as against Rs. 38,89,499/- disallowed by the learned AO. 3. The revenue has raised the following grounds :- "1. On the facts and in the circumstances, Ld. CIT(A) is not justified in considering the fact that the Assessing Officer has not pointed out any particular voucher in respect of such expenses from which he (i.e. the A.O.) could justify that particular payment was either bogus or excess" as a relevant fact to the issue whereas it is an admitted fact that his applicant had failed to produce the supporting bills/vouchers as noted by him also as a fact 'and consequently....
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....expenses incurred by similar industries and the said expenses were supported only with self made vouchers which were not verifiable. Accordingly he proceeded to disallow 20% of lorry expenses amounting to Rs. 38,87,499/- (20% of Rs. 1,94,37,495/-) and added back to the total income of the assessee. 5. On first appeal the assessee pleaded that the learned AO had not pointed out any particular voucher in respect of such expenses from which he could justify that particular payment was either bogus or excessive. It was argued that the learned AO had overlooked the fact that the books of accounts of the appellant were duly audited by a qualified Chartered Accountant both under the Companies Act, 1956 and also as per the provisions of section ....
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....nce charges paid to Tata Finance Limited. 8. The brief facts of this issue are that the assessee paid finance charges to Tata Finance Limited in the sum of Rs. 1,60,563/- under Hire purchase contract. The assessee relied on the CBDT Instruction No.1425 F.No.275/9/80 IT(B) dated 16-11- 81. In support of this contention that finance charges paid under hire purchase contract would not take the character of the interest in terms of section 194A and accordingly the applicability of TDS provision would not come into force. The learned AO however strangely observed that the said payment is in the nature of commission or brokerage and hence resorted to make disallowance u/s 40(a)(ia) of the Act for violation of the provisions of section 194H of ....
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....n the circumstances of the case is not justified in deleting the addition of Rs. 1,60, 563/- made on account of finance charges." 9. We have heard the learned DR. At the outset, we find that the payments of hire charges to Tata Finance Limited under the hire purchase does not come within the ambit of commission or brokerage. Hence we hold that the provision of section 194H would not be applicable. With regard to the applicability of the provisions of section 194A of the Act the reliance placed by the assessee on the CBDT Instruction No.1425 F.No.275/9/80 IT (B) dated 16-11-81 is well founded which is reproduced herein below for the sake of convenience :- "T.D.S. Section 194A of the Income-tax Act-Hire Purchase Transactions Appli....