TaxTMI 
TaxTMI 
2025 (1) TMI 1058
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....ssessment year 2017-18. The assessee has assailed the impugned order on the following grounds of appeal: "1. The learned Addl. Commissioner of Income Tax (Appeals) erred in partially confirming the disallowance of transportation expenses amounting to Rs. 2,19,981 which is excessive and unjustified in light of the past history of the appellant's business and the evidence provided. 2. The disallowance of expenses was made on an ad-hoc basis without proper reasoning or justification, which is against the principles of natural justice. 3. No show-cause notice was issued by the learned Assessing Officer before making the disallowance, violating the procedural fairness required under the Income Tax Act, 1961, and th....
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....o Rs. 44,64,558/-, viz. (i) tanker expenses : Rs. 43,99,618/-; and (ii) merchant share : Rs. 64,940/-. As the assessee had failed to substantiate its claim for deduction of expenses based on supporting bills and vouchers to the satisfaction of the A.O, therefore, the latter had on an ad-hoc basis disallowed 15% of the total expenses i.e. Rs. 6,69,683/- (15% of Rs. 44,64,558/-). Accordingly, the A.O vide his order passed u/s. 143(3) of the Act, dated 21.12.2019 after making the aforesaid addition determined income of the assessee firm at Rs. 23,95,353/-. 4. Aggrieved the assessee firm carried the matter in appeal before the ADDL/JCIT(A), Mumbai. In so far the disallowance of the assessee's claim for deduction of merchant share of Rs. 64,9....
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....) were issued and specifically the details in respect of transfer expenses were called for. However, the appellant did not produce any supporting though the parties were from the family members of the partners. According to the AO, the disallowance of 15% is reasonable and fair considering non-cooperation from the appellant. The appellant submitted that the merchant shares expense is being paid every year and the appellant is required to provide the services to the customers. These services are provided under the programme of BPCL and payment is made to BPCL only. Considering these facts, no disallowance of 15% should be made on ad hoc basis. The explanation given by the appellant is reasonable and it is held that....
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....td. Vs. DCIT, ITA No.247/JP/2019 (vii) M/s. Sunia Finlease Ltd. Vs. ITO, ITA No.07/RPR/2017 8. As the assessee firm had failed to substantiate its claim for deduction of tanker expenses of Rs. 43,99,618/- based on supporting bills and vouchers etc., therefore, I am of the view that the A.O had rightly observed that its claim for deduction could not be summarily accepted on the very face of it. At the same time, I cannot remain oblivion of the fact that there was no justification for the A.O to have disallowed a part of the aforesaid expenses on an ad-hoc basis, i.e. @ 15% of the total "tanker transport expenses" of Rs. 43,99,618/- which had, thus, resulted to a consequential disallowance of Rs. 6,69,683/-. I, say so, for the rea....
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....at as the GP/NP rates of the assessee firm was progressive in comparison to the preceding year, therefore, the said fact in itself suggested and rather dispelled the doubts as regards the authenticity of the claim for deduction of transport expenses that was raised by the assessee firm. 10. Apart from that, I find that the CIT(Appeals) without any justifiable reason had sustained the aforesaid ad-hoc disallowance of Rs. 2,19,981/- (i.e. 5% of Rs. 43,99,618/-). In my view the aforesaid ad-hoc disallowance of Rs. 6,69,683/- (supra) made by the A.O was merely haunted by his general observations and not on the basis of reference to any specific instance of an expenditure which as per him was for cogent reasons liable to disallowed. In the ba....