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TMI Blog2017 (8) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... there was no basis for making the adhoc disallowance. The AO did not doubt the incurring of expenses, he only doubted the mode of payments. In the present case, the payments of incentives to the drivers were made for timely delivery of the goods at the destination. It was claimed that such type of expenses had been accepted in the preceding as well as the succeeding year, the said claim was not rebutted at the time of hearing. We, therefore, decide that the adhoc disallowance without any basis made by the AO and sustained by the ld. CIT(A) was not justified - Appeal of the assessee is allowed. - ITA No. 4305/Del/2014 - - - Dated:- 27-4-2017 - Sh. N. K. Saini, AM and Smt. Beena Pillai, JM For The Assessee : Sh. Ved Jain, Adv. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t only grievance of the assessee relates to the confirmation of disallowance of ₹ 16,01,438/- made by the AO out of the expenses incurred on account of incentive paid to drivers. 4. Facts of the case in brief are that the assessee filed the return of income on 29.09.2010 declaring an income of ₹ 47,94,36,920/- which was processed on 09.04.2011. Later on, the case was selected for scrutiny. During the course of assessment proceedings, the AO noticed that the assessee had debited a sum of ₹ 80,07,191/- on account of incentive paid to drivers. He asked the assessee to explain the nature of those expenses, mode of payment and services rendered by the drivers. In response the assessee vide letter dated 18.02.2013 stated as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income of the assessee. ( Addition Rs.16,01,438/-) 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that it had achieved a growth of 24% in the total revenue and that the expenses incurred as incentive to drivers, were fully allowable, therefore, the disallowance made by the AO on assumption only, deserves to be deleted. The ld. CIT(A), however, found the reply of the assessee as general in nature and sustained the disallowance by observing that the entire expenses on this account were in cash and not fully verifiable. Therefore, the disallowance @ 20% appears to be in order. 7. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the AO and sustained by the ld. CIT(A) was not justified. Reliance was placed on the following case laws: * Friends Agency (P) Ltd. Vs CIT (2011) 237 CTR (Del.) 464 * CIT Vs S.S.P. (P) Ltd. (2011) 202 Taxman 386 (P H) * Lake Palace Hotels Motels Vs DCIT 81 TTJ 657 (Jodh.) 8. In her rival submissions the ld. CIT DR strongly supported the orders of the authorities below and further submitted that the assessee did not furnish any evidence in support of its claim for incurring the expenses which were mainly in cash. Therefore, the AO had no option except to make the estimated disallowance. The reliance was placed on the judgment of the Hon ble Supreme Court in the case of Keshav Mills Co. Ltd. Vs CIT (1965) 56 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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