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TMI Blog2018 (6) TMI 600X X X X Extracts X X X X X X X X Extracts X X X X ..... - neither the AO nor the CIT(A) draws any comparison of the impugned expenditure with corresponding figures in preceding or succeeding assessment year(s) so as to highlight any excessive element therein the assessee has also not substantiated all of its payees’ relevant details for the purpose of carrying out a random verification even - thus we deem it proper in these peculiar facts and circumstances that a lump sum disallowance @ 6% instead of 15% under challenge would be just and proper - hence AO is directed to recompute the impugned disallowance @ 6% afresh - Partly allowed in favor of assessee. - ITA No. 2254/Kol/2016 - - - Dated:- 6-6-2018 - Shri S. S. Godara, Judicial Member and Shri, M. Balaganesh, Accountant Member By App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7/- on the aground that the appellant has claimed an amount of ₹ 60,94,095/- towards carriage Inward charges and. ₹ 40,76,682/- towards loading and un-loading Charges. The appellant was asked to submit the details regarding the aforesaid transactions for loading and un-loading charges and carriage Inward charges. The AO observed that as per ledger of carrying charges it was seen that the payments were made for two individuals i.e. (1) Pranab Adhikari and (2) Tinku Pandey and that two for carrying 232 M.T. carriage inward was claimed to have been paid at the uniform rate of ₹ 150/- per metric ton and loading unloading charges was claimed to have been paid at the uniform rate of ₹ 100/- per metric ton and claimed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strangers. It is practically impossible for anyone to record the address etc. of strangers with whom you have worked once only. It is also needless. v. Our loading , unloading and carriage work is done through local lorries, van, cart, etc. which might be heavy, medium or light depending upon the load they have to carry that day. We again explain that they are not fixed vehicles. These are flying vehicles which work on day to day basis. Keeping of registration number was neither possible nor necessary In our case. The AO analyzed reply of the appellant as under:- ''If assessee's reply as above is analyzed, it is understood that assessee has virtually expressed its inability to furnish the details and explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cash which prohibited verification of the transactions. Fourth, the payments were all claimed just below ₹ 20,000/- so as to get away from the provisions of section 40A(3) of the Act Fifth, the payments were made to 700 different Individuals so that no Individual was paid In excess of ₹ 30,000/- on a single day or In excess of ₹ 75,000/- In the whole year so as to get away from the TDS provisions u/s 194C of the Act Sixth, although some of the purchase bills did mention the Iorry registration number, but it is not at all clear whether the expenses were borne by the assessee of the concerned seller himself. In fact, many of the big and reputed concerns usually arrange their own vehicles and bear the cost of carriage and l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Incurred some expenses on these two accounts since its business activity is genuine, However, due to the reasons mentioned above, it is concluded that the expenses of Rs,60,94,095/- towards carriage inward charges and ₹ 40,76,6,82/- towards loading unloading charges is vastly inflated and 15% of such expenses or ₹ 15,25,617/- is disallowed and added back to total income. At the appellate stage, the appellant has argued that AO has made estimation of the expenses whereas the expenses were made for the business purposes only. The appellant's reply has been perused. It is seen that the appellant has not made any attempt to controvert the findings of the AO with material evidences. The appellant has failed to establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... VIIB of the Act. We do not agree to this reasoning in entirety. We repeat the fact that assessee s business of iron and steel dealership and trading requires of such kind of routine business expenditure. Neither the Assessing Officer nor the CIT(A) draws any comparison of the impugned expenditure with corresponding figures in preceding or succeeding assessment year(s) so as to highlight any excessive element therein. The assessee has also not substantiated all of its payees relevant details for the purpose of carrying out a random verification even. We deem it proper in these peculiar facts and circumstances that a lump sum disallowance @ 6% instead of 15% under challenge would be just and proper. We make it clear that our instant estimati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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