2015 (10) TMI 1620 - AT - Income Tax

Disallowance of expenses relating to diesel and trip bhatta - as per assessee as in A.Y. 2010-11, the CIT (A) has sustained the disallowance at 1.11% and therefore, in the year under appeal the disallowance should be scaled down to1.11% of the total expenditure - Held that - We find that in the Assessment Year 2010-11, the CIT (A) given a finding that the ratio of expenditure to transport income has come down from 62.47% to 52.39% and the gross profit has also increased to 37.53% and 47.61%. Before us the A.R. of the assessee has not brought any material on record to show that the ratio of expenditure to transport income has come down drastically and the gross profit has also increased substantially as was the case before the CIT(A) in the assessment year 2010-11. In absence of the same, the contention of the A.R. of the assessee cannot be accepted. We therefore, dismiss this ground of appeal. - Decided against assessee.

Summary

Issues:
1. Disallowance of expenses related to diesel and trip bhatta.
2. Addition of R.T.O. penalty on an adhoc and estimated basis.

Issue 1: Disallowance of expenses related to diesel and trip bhatta:
The appellant challenged the disallowance of Rs. 13,82,433 from the expenses concerning diesel and trip bhatta. The Assessing Officer disallowed a portion of the expenses based on previous years' orders, resulting in an addition of Rs. 41,47,300. The CIT (A) reduced the disallowance to Rs. 13,82,433, following a Tribunal decision for a previous assessment year. The appellant argued for a further reduction based on a different ratio of expenditure to transport income compared to the previous year. The Departmental Representative supported the lower authorities' decisions. The Tribunal found that the CIT (A) had correctly restricted the disallowance based on previous Tribunal decisions, resulting in a 3.33% disallowance rate.

Issue 2: Addition of R.T.O. penalty on an adhoc and estimated basis:
The appellant initially contested the addition of Rs. 1,00,000 on an adhoc and estimated basis towards R.T.O. penalty. However, during the appeal hearing, the appellant's representative stated that they were not pressing this ground of appeal, leading to its dismissal for want of prosecution. Consequently, the appeal of the assessee was dismissed, with the order pronounced on 19.6.2015.

In conclusion, the judgment by the Appellate Tribunal ITAT Ahmedabad addressed the issues of disallowance of expenses related to diesel and trip bhatta, as well as the addition of R.T.O. penalty on an adhoc and estimated basis. The Tribunal upheld the CIT (A)'s decision to restrict the disallowance based on previous Tribunal decisions, while the second issue was dismissed due to the appellant not pressing the ground of appeal during the hearing.