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TMI Blog2016 (6) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses. We therefore restrict the disallowance to ₹ 2833/- - Decided partly in favour of assessee Disallowance on account of shop expenses - Held that:- Looking to the facts and nature of business of the assessee, we do not find it reasonable to make disallowance of this petty amount of ₹ 5124/- on account of shop expenses. We, therefore delete the addition. - Decided in favour of the assessee. Disallowance out of Vehicle expenses/depreciation on vehicles - Held that:- Since the assessee has not maintained log book/details in maintenance of these vehicles, therefore, personal use of the vehicles/car cannot be ruled out. Therefore, we are of the view that it will be reasonable to restrict the disallowance @ 10% which comes to ₹ 17,358/-. Assessee will get relief of balance amount.- Decided partly in favour of assessee - ITA No. 1031/JP/2013 - - - Dated:- 30-5-2016 - Shri T. R. Meena, AM And Shri Laliet Kumar, JM For the Assessee : Shri B. V. Maheshwari (C.A) For the Revenue : Ms Roshanta Meena (JCIT) ORDER Per Shri Laliet Kumar, J. M. This is an appeal filed by the assessee against the order of ld. CIT (Appeals), Kota dated 29.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a)(ia) of the Act. The assessee was asked to furnish explanation/justification vide letter dated 17.12.2012. In compliance, the ld. A/R of the assessee vide his written submission dated 26.12.2012 has stated that Disallowing of Transportation u/s 40(a)(ia):- As per the provision of 194C(6), no deduction shall be made from any sum credited or paid likely to be credited or paid during previous to the account of a contractor during the course of business of plying, hiring or leasing goods carriage, on furnishing of his Permanent Account No., to the person paying or crediting such sum. S. No. Name Amount PAN 1. New M.P. Rajasthan Freight Carrier 87870 AAGFN 6019 G 2. Ekta Cargo Carriers 198850 AIVPB 0274 C 3. Dwarka Transport 217925 AABPB 3202 D 4. Shri Jain Transport Co. 162720 ACYPJ 84 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee took another plea that assessee had Permanent Account Number of the transporters and, therefore, no TDS was deducted as per provisions of section 194C(6). It was seen that the A.O. brushed aside this argument on the plea that the assessee has not submitted any documentary evidence that he was having PAN of these persons at the time of payment/credit of the amount. In my opinion, it is not necessary that any person has to prove by documentary evidence that he was having PAN of the persons at the time of payment. It is sufficient, if the same is furnished at the time of hearing. However, it was seen that in two cases namely, (i) GRC Ghoman Road Carriers (Rs. 3,46,550/-) and (ii) EKAT container Goods Carrier (Rs. 84,160/-) the PANs was not furnished before AO. Therefore, it is held that TDS was deductible from the amounts paid to these persons and assessee has committed violation of section 40(a)(ia). Therefore, addition of ₹ 4,30,710/- is confirmed. The AO is directed to delete balance addition of ₹ 9,66,360/-. This ground of appeal is, therefore, partly allowed. 4. Now the assessee is in appeal before us. 4.1. The ld. A/R f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Permanent Account Number much earlier to the agreement entered with the assessee and the assessee has furnished the PANs of the transporters to the assessee. Therefore, the ld. A/R submitted that when PAN is available with the assessee, there is no requirement to deduct TDS and thus section 40(a)(ia) is not applicable. The ld. A/R, therefore, requested to delete the addition. 4.2. On the other hand, the ld. D/R for the assessee supported the order of the AO. 4.3. We have heard rival contentions and gone through the facts and circumstances of the case. It is seen that the assessee has made payments on account of transportation expenses to the tune of Rs. ₹ 13,97,070/- to the seven transporters. According to the AO, no TDS has been deducted on these payments though these were contractual payment in nature under section 194C. The AO, therefore, observing that the assessee has committed default in not deducting the TDS, the payments made attract provisions of section 40(a)(ia) of the Act. Before the AO, assessee explained as per the provision of 194C(6), no deduction shall be made from any sum credited or paid likely to be credited or paid during previous to the account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltantly comes to ₹ 1,20,000/- p.a. for a family of four members. The AO, therefore, after reducing the household expenses declared by the assessee of ₹ 91,000/-, made the addition of ₹ 29,000/- (Rs. 1,20,000 91,000/-). 6. Being aggrieved, the assessee preferred appeal before ld. CIT (A), who confirmed the action of the AO by observing as under :- I have gone through AO s finding and assessee s submission. Estimation of household expenses at ₹ 1,20,000/- for a family of four members including two school going children was more than reasonable. Therefore, addition of ₹ 29,000/- is confirmed. 7. Now the assessee is in appeal before us. 7.1. The ld. A/R for the assessee submitted that household expenses of Sindhi families are much less in comparison to families of other communities. He estimated the household expenses of the assessee at ₹ 78,000/-. The ld. A/R further submitted that the AO has presumed the household expenses on the basis of surmises and conjectures, which is not fair. Therefore, he requested to delete the addition. 7.2. On the other hand, the ld. D/R supported the order of ld. CIT (A). 7.3. We have heard riva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t vouchers for the expenses incurred towards shop expenses are not properly maintained, the same are hand written and, therefore, in absence of proper vouchers, the same are not verifiable. Thus the AO made the disallowance of ₹ 5124/- @ 20%. 12. On appeal, the ld. CIT (A) confirmed the disallowance holding that considering the facts of the case and non-verifiable nature of shop expenses, some disallowance cannot be ruled out. Therefore, he considered it reasonable to confirm the disallowance made by AO @ 20%. 13. Now the assessee is in appeal before us. 13.1. The ld. A/R for the assessee submitted that this is a very megre expenditure, the AO disallowed the expenses for the sake of making disallowance other-wise for a trader whose turnover is ₹ 946.50 lacs, has only incurred ₹ 2135/- per month as shop expenses. The ld. A/R requested to delete the disallowance. 13.2. The ld. D/R supported the orders of the lower authorities. 13.3. We have gone through the rival submissions and perused the material on record. Looking to the facts and nature of business of the assessee, we do not find it reasonable to make disallowance of this petty amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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