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TMI Blog2018 (6) TMI 1385X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Vikash Jain (CA). For The Revenue : Smt. J.C. Kulhari (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-3, Jaipur dated 13.11.2017 for Assessment Year 2012-13 wherein the following grounds of appeal have been taken: 1. On the facts and in the circumstances of the case and law, the Commissioner of Income Tax(Appeals)-3, erred in confirming 10% disallowance from travelling expenses and conveyance expenses (i.e. 10% of 751121/- and 10% of 104856/-) and there by confirming addition of ₹ 85598/- to the total income of the assessee. 2. On the facts and in the circumstances of the case and law, the Commissioner of Income Tax(Appeals)-3, erred in confirming 10% disallowance from Machinery Repair expenses (i.e. 10% of ₹ 12,92,284/- and thereby confirming addition of ₹ 1,29,228/- to the total income of the assessee. 3. That on the facts and in the circumstances of the case and law the Commissioner of Income Tax(Appeals)-3, erred in assessing the total income at ₹ 75,67,036/- as against returned total income of ₹ 73,52,210/- declared by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as dealers about the cattle feed produced by the firm, they remain in the field travelling for 15-30 days altogether. The assessee has incurred a sum of ₹ 7,51,121/- on the travelling and ₹ 1,04,856/- on the conveyance of these sales personnel during the year 2011-12. Due to their efforts, the firm has managed to increase the turnover which has increased from ₹ 20,35,06,246.40 in F. Y. 2010-11 to ₹ 29,23,13,649.23 in the F.Y. 2011-12. This shows that around 44% sales have increased due to the efforts of sales personnel. Further, conveyance expenses are paid to the employees for their local conveyance charges for executing the work of our organization, which is credited to them at the end of the month along with salary schedule. 5. It was further submitted that as the sales person has to travel from small village to towns where they are not able to get bills, in all cases, for their expenditure, hence the assessee has formulated a policy whereby the sales personnel are being reimbursed by fixed amount towards their boarding and lodging charges as well as travelling charges and the payment are being made according to the policy framed by the firm. Because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .09.2012. 8. The ld DR is heard who has vehemently argued the matter and submitted that the ld CIT(A) is more than reasonable in restricting the disallowance to 10% of total travel and conveyance expenses and no further relief may be provided to the assessee. 9. We have heard the rival contentions and perused the material available on record. It is a case where the AO has disallowed 20% of travelling and conveyance expenses incurred by the assessee and which has been sustained to the extent of 10% by the ld CIT(A). There is no finding recorded regarding any specific defect in claim of the expenses or the expenses have not been incurred for the purposes of the business. It is a clear case of adhoc disallowance of expenses which cannot be sustained in the eyes of law. In the result, addition so sustained by the ld CIT(A) is hereby deleted. 10. Regarding Ground No. 2, briefly stated, the facts of case are that during the year under consideration, it was observed by the AO that the assessee has incurred ₹ 12,92,284/- towards machinery repair expenses where as in the last preceding year, there was no such expenditure in this head of expenses. Further, during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring to your kind notice that even payment made for these expenses are done mostly against the bill raised by the vendors from which dealings has been made in cash. Copy of Machinery repairs expenses concerning cash payment is attached herewith at paper book Sr. no. 14 to25 which clearly shows in most of the cases, bill no, amount of the bill and the name of the party with whom such payment has been made. It means that even where the cash payment has been made by the assessee, such expenses are fully vouched. And as such whole of the expenses are against bills. So the conclusion reached by Ld. AO is far from the truth. Further, during the course of assessment proceedings, no query relating to justification of machinery expenses was enquired from the assessee. It was last minute thought of the Ld. AO, which made addition only for the sake of making addition. We are attaching herewith attaching the copy of note sheet at Sr. No. 54 to 55, obtained during the course of assessment proceedings in which certain queries were made and the copy of reply against such queries are attached at Sr. No. 45 to 53 of the paper book. Further, there were also machinery repair expenses in previous also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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