TaxTMI 
TaxTMI 
2018 (6) TMI 600
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 25 lakh) u/s 40(b) and Rs. 15,25,617/- pertaining to carriage inward charges / loading unloading expenditure; respectively in proceedings u/s 143(3) of the Income Tax Act, 1961; hereinafter 'the Act'. Heard both the parties. Case file perused. 2. Learned counsel representing assessee states at the outset that it no more wishes to press for its former substantive ground challenging section 40(b) disallowance of Rs. 25,000/- (wrongly incorporated as Rs. 25 lakh) keeping in mind smallness of the issue. The same is therefore rejected as not pressed. 3. We advert to assessee's latter substantive ground assailing correctness of both the lower authorities action disallowing inward carriage / loading unloading charges disallowance of Rs. 15,25,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inal show-cause was issued by the AD and appellant replied as under:- i. Our carrying of goods happens through local lorries, van-cart, etc. and are petty in nature and they are not fixed carrying man for us. We use to carry our goods through strangers and they are petty in nature which is evident from our carriage ledger submitted with you. These people don't Issue bills, only they sign the vouchers, which are given to you. ii. Our purchase bills are sale bill/s for those parties, which are issued by them only. It is upto them to reflect registration no. or not. The reflection of vehicle number hardly makes any difference in our transportations. iii. In some of our purchases, carrying charges are borne by the seller party, this de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....payments. It is also very unusual that it will employ different person on each and every day. Even the payments made on a single day were claimed to have been made to different persons. Assessee's claim that all the seven hundred persons were strangers and could not be located at present is also very' difficult to believe. Hence, the assessee failed to establish the identity or these 700 persons. Second, by his own admission, these charges were not mandatorily borne by him. Some time the charges were borne by the sellers themselves. But except for goods purchased on 15/03/12 as discussed above, the expenses appeared to have been borne by assessee himself for each and every purchase since the quantity of goods purchased as per purcha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce is to employ one's own trusted persons for this purpose. Ninth, the assessee furnished some copies of self made cash payment vouchers trying to establish that the payments were genuine. But it Is matter of common sense that such self made vouchers do not establish anything since it is not at all difficult to prepare these as and when required and to get signature of some sundry persons. As already discussed above, assessee failed to establish the identity of the persons themselves. The conclusion which can be drawn is that the assessee created fictitious names for these two purposes so as to avoid the provisions of section 40A(3) [cash payment in excess of Rs. 20,000/- and section 40(a)(ia) read with sec. 194C (disallowance of expens....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pellant will deploy daily new persons. Keeping in view all the aforesaid facts, the addition made by the AO is upheld. This ground of appeal is hereby dismissed." 4. Both the Learned Representatives reiterate their respective pleadings against and in support of the impugned disallowance. We notice in this backdrop of facts that assessee is a partnership firm in wholesale and retail business of iron and steel. Both the lower authorities are fair enough in not rejecting its claim of the impugned expenditure in toto as the said business admittedly involves inward carriage as well as loading and unloading of iron and steel stock items. The Assessing Officer as well as CIT(A) take note the fact that the assessee has made payment to more than 7....