TaxTMI 
TaxTMI 
2021 (3) TMI 2
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....rder, are that during the course of assessment proceedings, the Assessing Officer noticed that the assessee has claimed total expenses of Rs. 8,25,28,757/- under the head " hire charges paid to trucks". The Assessing Officer required the assessee to furnish ledger copy of accounts in respect of such expenses and also related bills and vouchers. Although the AR of the assessee filed ledger copy of accounts earlier, but as required by the AO, the assessee failed to bills any bills and vouchers and other required details. Therefore, the AO was of the view that the genuineness of the expenses is unsubstantiated. Accordingly, he disallowed 20% of the total expenses of Rs. 8,25,28,757/-, which comes to Rs. 1,64,05,751/- and added the same to the total income of the assessee. 4. During first appellate proceedings before the ld CIT(A), the assessee challenged the addition and submitted following written submissions: "3. That, while completing assessment, the AO has disallowed 20% of hire charges paid to trucks on the ground that the hire charges expenses claimed to the tune of Rs. 8,25,28,757 appears to be abnormally high, being biased with this opinion, he called for production of conn....
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.... Books of Account, the learned A.O. has already prefixed his mind. Therefore, the impugned disallowance of Rs. 1,65,05,751.00 is not sustainable in the eye of law, hence needs to be deleted in the interest of justice." 5. On appeal, ld CIT(A) restricted the disallowance to 2% as against 20% made by the AO by observing as under: "2.2 I have considered the matter and perused the facts on record. It is clear from the assessment order that at the time of assessment proceeding the assessee failed to produce the books of account and the bills & vouchers in support of the impugned expenses which constitutes the major part of the expenses of the assessee. In the absence of books of account and bills & vouchers, the AO is fully justified to question the genuineness of the expenses. Hence, the action of the AO to consider part disallowance of the expenses cannot be found fault with. The same is fully justified on principle. The only point to be considered is whether the disallowance made @20% of the claim is reasonable and not high and excessive. The AO has not given any reasons as to why he considered disallowance of 20% as reasonable. Keeping in view the nature of the business of the a....
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.... Hiring charges paid to truck Trnsport. Expenses Net profit Profit % Assessment 12-13 9,11,12,339 6,50,67,133 71.41 35,44,942.82 3.89 143(3) 13-14 9,71,23,857 7,12,17,133 73.33 35,83,752.55 3.08 143(3) 14-15 10,63,17,938 8,25,28,757.21 77.62 39,86,922.58 3.75 15-16 5,18,70,900 4,44,61,193.62 85.72 75,55,159 2.99 u/s.143(1) 9. He submitted that the net profit shown by the assessee in the year under consideration is higher than the net profit shown in the succeeding assessment year as well as the immediately preceding assessment year. These facts have not been controverted by ld CIT D.R. before us. 10. We have heard the rival submissions and perused the material on record. In the present case, the assessee is in the business of transport works. During the year under consideration, the assessee has claimed total expenses of Rs. 8,25,28,757/- under the head "hire charges paid to trucks". From a careful reading of the assessment order, it is evident that the AO has not disallowed 100% expenditure and he had considered the maximum expenditure as genuine and having been incurred for the purpose of business, which m....
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....1% and 73.33% on gross transportation receipts earned by the assessee wherein, during present assessment year i.e. 2014-15, this percentage has substantially enhanced to 77,.62% . Therefore, this allegation cannot be accepted that the claim of the assessee is partly bogus or not allowable. We may also point out that the expenditure claimed by the assessee during immediately previous two assessment years and succeeding assessment year has been accepted by the department without any dispute and the profit percentage, which comes to 2.75% of total turnover after considering the part addition confirmed by the CIT(A) is sufficient to cover all possible leakage of revenue. Therefore, in absence of any substantial and acceptable submission of the ld CIT DR, we do not find any valid reason to interfere with the findings of ld CIT(A). 12. We find that the Hon'ble Supreme Court in the case of Radhasoami Satsang vs CIT (1991) 193 ITR 321 (SC) held that the principle of resjudicata is not applicable in the Income tax matter. But findings of earlier years on the same matter are relevant where all fundamental facts permitting through different assessment years have been found as a fact one way ....