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Issues involved: Appeal against deletion of disallowance of vehicle insurance expenses.
Summary: Issue 1: Disallowance of vehicle insurance expenses The Revenue appealed against the deletion of disallowance of Rs. 28,42,119 out of vehicle insurance expenses by the CIT(A). The AO disallowed the amount as the insurance charges were paid for a period falling in the subsequent financial year. However, the CIT(A) allowed the claim based on consistent accounting method followed by the assessee. The Tribunal upheld the CIT(A)'s decision, stating that under the mercantile system of accounting, the assessee is entitled to claim deduction based on incurring the liability, even if the payment is made in a different year. The Tribunal referred to a similar case where the High Court allowed deduction for expenses actually incurred, regardless of the accounting method. Therefore, the Tribunal dismissed the appeal, upholding the deletion of disallowance of vehicle insurance expenses. End of Summary
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