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TMI Blog2020 (7) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... a it was not possible to collect all the vouchers. These expenses in cash duly shown in the ledgers and books regularly maintained in the course of business and later are put cumulatively under the head Miscellaneous Expenses for which only self made vouchers could be produced. Assessee s accounts are audited and the auditor has not found any mistakes or short-comings. The AO as well as the CIT(A) has made the disallowance without rejecting the books of accounts. It is noted that the expenses claimed by the assessee as miscellaneous expenses while plying the trucks in remote areas of Assam, Meghalaya and Mizoram cannot be said to be an unreasonable expense when the assessee has a turnover of ₹ 10.63 cr. and it returns gross profi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal preferred by the assessee against the order of Ld. CIT(A)-4, Kolkata dated 22-03-2019 for the assessment year 2014-15. 2. Though the assessee has raised as many as six grounds of appeal, ground nos. 1 and 6 are general in nature and, therefore, dismissed. 3. The Ld. AR at the outset pointed out that ground nos. 4 and 5 were not pressed by the assessee before the Ld. CIT(A), therefore, he has dismissed those grounds by referring this fact at para 6 of the impugned order and, therefore, before me the Ld. AR fairly did not press ground nos. 4 and 5 and, therefore, the same are dismissed. 4. Coming to ground no. 2 which is against the action of the Ld. CIT(A) in confirming the disallowance of miscellaneous expenses of ₹ 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... j D. Shah appearing for the assessee brought to my notice that the assessee is into transport business and is plying trucks in the North East States especially in Assam, Meghalaya and Mizoram. According to him, the assessee had declared a turnover of ₹ 10.63 cr. and had shown gross profit from the business to the tune of ₹ 2.75 cr. which comes to 25.80% (G.P.). The ld. AR pointed out to me the practical difficulties that are faced in the North East areas where the terrain (hilly) and roads are difficult to ply trucks. According to him, the drivers and cleaners of the trucks incurred small expenses while plying the truck in these remote areas and pointed out that this is due to the bad condition of the hilly terrain they come acr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2,77,418/-. Before me the Ld. AR has contended that the assessee is plying trucks in the scheduled areas of Assam, Meghalaya and Mizoram. It has been brought to my notice that due to the bad conditions of the road and since it is hilly terrain due to the incessant rain and bad weather the conditions of the road are bad and, therefore, the truck drivers incurred expenses for repairs of the trucks, (frequent tyre burst etc.) for which the local repair shops insist on cash and were reluctant to give any bills/vouchers. The truck drivers claimed the refund from the assessee the expenses through self made vouchers and since the assessee s central office is at Kolkata it was not possible to collect all the vouchers. And these expenses in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved, assessee preferred an appeal before the Ld. CIT(A) who confirmed the action of the AO by noting that the assessee did not produce any vouchers and the expenses incurred are in cash. According to him, the two ledgers which were produced shows monthly expenses of puja and, therefore, Ld. CIT(A) observed that since it is not clear whether there is a temple inside the business premises on which expenses have been incurred it cannot be held that these expenses were only for the purpose of the business of the assessee and, therefore, he disallowed the same. Aggrieved, the assessee is before me. 8. Having heard both the parties, it is noted that the assessee claimed puja expenses of ₹ 1,65,308/- which has been disallowed by bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garlands, bhog etc. for safe and smooth running of the vehicle while they go to the pre-destined location which are located in the remote areas of Assam, Meghalaya and Mizoram to deliver/collect goods. The expenses thus it is noted are incurred by the assessee for puja is for the smooth functioning of the business of transport as discussed cannot be disallowed. Since it has been found that the expenses incurred are for the smooth functioning of the business of plying trucks, the expenses need to be allowed. However, taking into consideration the peculiar facts and circumstances of the case, 10% of the expenses may be disallowed for plugging the revenue loss if any and the balance amount is directed to be deleted. 9. In the result, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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