2017 (8) TMI 337

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....e facts and circumstances of the case, the learned CIT(A) has erred in passing the order without giving assessee a proper and adequate opportunity of being heard in violation of principle of natural justice. 3(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the adhoc disallowance of an amount of Rs. 16,01,438/- made by the AO, out of expenses incurred on account of incentive paid to drivers. (ii) That the disallowance has been confirmed despite the same being made arbitrarily at the rate of 20% without there being any basis for the same. (iii) That the above disallowance is bad in law and unsustainable as the assessee is maintaining regular books o....

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....tra pain for timely delivery at the destination. It is a normal trade practice to get the express service (to the extent required and possible) at the cost of normal and ordinary road movement by adopting these motivational initiatives. A sample copy of incentive/prize slip is also being attached for your kind reference and better understanding. Further a detail of the expenses incurred / booked branch wise is also being attached herewith for your kind perusal." 5. The AO after considering the submissions of the assessee disallowed a sum of Rs. 16,01,430/- by observing in para 5.1 of the assessment order dated 28.02.2013 which read as under: "5.1 I have considered above submission of the assessee and have found no force in them ....

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....hat neither in the preceding year nor in the subsequent year, such type of disallowance was made by the AO, therefore, the disallowance made by the AO and sustained by the ld. CIT(A) was not justified. It was also contended that the assessee for providing the services on transportation of goods by road, has to take the services from fleet owners/transporters at pre decided rate and to take the best out of that (timely delivery of goods at the destination), the assessee company also agreed to pay some amount as incentive/prizes to the drivers of that particular vehicle in which the time incentive goods were moving and because of the incentive/prizes, the drivers took extra pain for timely delivery at the destination. It was further submitted....