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TMI Blog2016 (5) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned AO, the learned AO had no option but to resort to some estimation and hence going by the past history of the assessee he found that the disallowance of ₹ 2,50,000/- would meet the ends of justice and accordingly granted relief for the balance sum of ₹ 36,39,499/-. - Decided against revenue Disallowance u/s 40(a)(ia) - finance charges paid to Tata Finance Limited - Held that:- The payments of hire charges to Tata Finance Limited under the hire purchase does not come within the ambit of commission or brokerage. Hence we hold that the provision of section 194H would not be applicable. With regard to the applicability of the provisions of section 194A of the Act the reliance placed by the assessee on the CBDT Instructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erational expenses made in the assessment to a nominal amount of ₹ 2,50,000/- without any basis. 2. Whereas it is an admitted fact that his applicant had failed to produce the supporting bills/vouchers and whereas Ld. CIT(A) is also satisfied that the A.O. was not left with any option but to estimate the disallowance, Ld. CIT(A) is not justified in restricting the disallowance to a nominal amount of ₹ 2,50,000/- as against the disallowance of as much as of ₹ 38,89,499/-. 3. Ld. CIT(A) in respect of the applicant's claim of expenditure on account of Lorry operating expenses is not justified in considering the onus of proof lying with the A.O. merely on the fact that the claim was consistent with the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no scope for making adhoc disallowance. The learned CIT(A) observed that from the perusal of the balance sheet of the assessee from A.Yrs. 2006-07, 2007- 08 and 2008-09 the total lorry expenses was 80%, 81% and 83% respectively of lorry income. The learned CIT(A) also observed that the AO had not brought any comparable cases in the same line of business to justify his estimated disallowance of 20%. However, the learned CIT(A) found that in the absence of evidence produced in and in the absence of supporting bills and vouchers produced by the assessee before the learned AO, the learned AO had no option but to resort to some estimation and hence going by the past history of the assessee he found that the disallowance of ₹ 2,50,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that the payment of finance charges under hire purchase contract to Tata Finance Limited does not come within the ambit of commission or brokerage and he reiterated his reliance placed on the Instruction No.1425 of CBDT (supra) and stated that there is no violation of any TDS provision and hence prayed for deletion of the disallowance. The contentions of the assessee were duly appreciated by the learned CIT(A), who deleted the disallowance. Aggrieved, the revenue is in appeal before us on the following grounds:- 5. On the facts and circumstances of the case, Ld. CIT(A) has erred in considering the matter of payment of Finance Charges to Tata Finance as a case pertaining to the payment of Hire Purchase instalment and observing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 275/9/80 IT(B) dated 16-11-81 from CBDT. Vol. XXVII No. 3 page 403) In a hire-purchase contract the owner delivers goods to another person upon terms on which the hirer is to hire them at a fixed periodical rental. The hirer has also the option of purchasing the goods by paying the total amount of agreed hire at any time or of returning the same before the total amount is paid. It may be pointed out that part of the amount of the hire purchase price is towards the hire and part towards the payment of price. The agreed amount payable by the hirer in periodical instalments cannot, therefore, be characterised as interest payable in any manner within the meaning of section 2 (28A) of the Income-tax Act, as it is not in respect of any mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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