9911796707
TMI Blog2015 (1) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... he expenses is less i.e. 35.69% in this year, the ad hoc disallowance without bringing in comparable cases is not justified. Moreover, as per section 44AE, the income from four trucks works out to ₹ 1,64,000/- whereas the assessee has declared an income of ₹ 5,93,612/- which puts the assessee’s case in a better position; and the assessee’s contention that taking into consideration the transport business carried out by the assessee, wherein expenses are incurred for which no bills can be obtained always, cannot be ruled out. So we find force in the argument of the ld. AR, that in the aforesaid facts and circumstances and considering the previous year results too, the ad hoc disallowance was not warranted. So we direct deletion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 39,51,550/- and the assessee also filed copy of this account which showed that most of these expenses were on purchase of fuel whereas a portion thereof was payment of freight to other parties, from whom the assessee hired trucks for transportation. The AO observed that in the absence of the bills, neither the amount claimed was verifiable nor the nature of the expenses or proportion of fuel expenses and freight expenses in the gross amount could be ascertained, so rejected the books of the assessee. He also observed that freight payments also attracted TDS deduction liability. Therefore, the AO made a lump sum disallowance of ₹ 5 lakhs taking into account the unverifiable nature of these expenses. 3.1 Aggrieved, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd fuel charges etc. at ₹ 39,51,550/ -. He further submitted that in the preceding year, the transportation receipts were of ₹ 36,82,297/- against which the freight and fuel charges were claimed at ₹ 21,56,080/- which worked out to 58.55% of the receipts, whereas during the year under consideration, such charges work out to 58.17% of the receipts. He submitted that the books of account had been rejected by the AO on account of non-availability of the relevant vouchers for such expenses and made the disallowance. But, he submitted that for making the disallowance, the AO had not given any basis. He submitted that that after rejection of the books of account, the AO had to make best judgment of assessment and such best judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars 2008-09 2007-08 RECEIPTS 6,144,530.00 5,931,687.00 GROSS PROFIT 2,192,980.00 1,825,077.00 G.P. RATE 35.68% 30.70% NET PROFIT 1,237,205.00 999,757.00 N.P. RATE 20.13% 16.80% AFTER DEPRECIATION 13.03% 7.44% He submitted that the assessment order for preceding year i.e. 2007-08 had also been made scrutiny assessment u/s 143(3) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orks out to 35.69% only. When the department has accepted the expenditure of 36.34% in AY 2007-08, in that year, so when the expenses is less i.e. 35.69% in this year, the ad hoc disallowance without bringing in comparable cases is not justified. Moreover, as per section 44AE, the income from four trucks works out to ₹ 1,64,000/- whereas the assessee has declared an income of ₹ 5,93,612/- which puts the assessee s case in a better position; and the assessee s contention that taking into consideration the transport business carried out by the assessee, wherein expenses are incurred for which no bills can be obtained always, cannot be ruled out. So we find force in the argument of the ld. AR, that in the aforesaid facts and circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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