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TMI Blog2024 (11) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... er account, bills & vouchers in order to verify the transport expenses. The assessee produced ledger account of only 3 parties to whom total payment of Rs. 29,68,838/- was made. Thereafter, the AO required the assessee to produce ledger account copies and bills & vouchers in respect of expenditure of Rs. 2 Lakhs or more, which also was not fully complied. The AO, therefore, disallowed the transport expenses of Rs. 36,33,945/-, which was not supported by any bills & vouchers and in respect of which no evidence was produced before the AO. Accordingly, the assessment was completed u/s 143(3) of the Act on 22/03/2021. 3. Aggrieved with the order of the AO, the assessee had filed an appeal before the First Appellate Authority, which has been decided vide the impugned order and the addition as made by the AO was confirmed. 4. Now, the assessee is in second appeal before us and has taken following grounds in this appeal: "[1] The Ld. CIT(A) NFAC, Delhi was grievously erred in confirming the disallowance of transport expenses of Rs. 35,85,237/- out of total addition made by the Ld. A.O. of Rs. 36,33,945 being not supported by any bill/voucher which is not correct. The appellant submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year and only the bills were raised in the specific period and this fact doesn't raise any doubt on the genuineness of expenditure. As regarding deduction of TDS and transport expenses, he has drawn our attention to provision of Section 194C(b) of the Act and submitted that the transporters were having less than 10 carriages and, therefore, there was no requirement to deduct TDS. 8. We have carefully considered the rival submissions and materials brought on record. The assessee has filed a paper book containing 1 to 80 pages wherein copy of certain invoices and other details in respect of the parties pertaining to whom transport expense was disallowed, has been filed. It is found that the AO had disallowed the transport expense of Rs. 36,33,945/- for the reason that no supporting bills and vouchers or any other evidence was brought on record to this extent. The assessee had not explained as to why the ledger copies of the parties and the bills & vouchers for transportation expense of Rs. 36,33,945/- could not be produced before the AO. Nevertheless, this aspect was examined by the Ld. CIT(A) and he had called for specific details in this regard but the detail as requisitioned w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sand were transported from 01.04.2012 to 30.06.2017. But the bill was generated on 30.06.2017. This means that the bill was not generated date-wise or trip-wise and this is not a normal and common phenomenon. The bill does not contain any vehicle no. nor any challan no. 14. The bill does not match with the ledger account submitted by the assessee. The bill is for Rs. 3,58,745/- whereas debit entry in ledger account is for Rs. 3,55,158/-. So the figures do not match. Further the ledger narrates "transportation expenses 5%" whereas in the bill rate of service tax is 0.00%. Ledger does not contain any journal/voucher no. The appellant was asked to submit ledger of three years but ledger of only year was given. Reason for non-submission of other years was not given. So, the bill and ledger has not been maintained on day-to-day basis nor does it mention the vehicle no. and voucher no. So, the claim of this transportation expenses is an accommodation entry. The additional details called for through letter dated 09.03.2023 was also not furnished. Shivani J. Patel 15. Assessee has submitted one invoice issued by Patel Shivani Jaiminkumar for Rs. 10,73,372/-. This invoice is for tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsporter during the year till 31.07.2017. If he could have done any transaction journal voucher should have been a different. It means, he had not done any other transaction so far. This proves that all these bills and ledgers are accommodation entry. However, the quantum of addition made by the AO is not correct. He has made the addition of Rs. 48,708/- also which is brought forward from previous assessment year. So, addition should be only for Rs. 1,86,467/- and not Rs. 2,35,175/-, Dharmendra Kumar A. Patel 19. From the ledger of this party in the books of the assessee it is found that the party has done transportation work for the assessee. Narration in the ledger is transportation expense 5% but, in the bill, there is no entry of any service tax, GST or VAT So, the transaction appears to be an accommodation entry in connivance with both the parties. The assessee has produced the ledger of A.Y. 2018-19. From perusal of the ledger it is found that he has done job work for the assessee. So, the transporter during A.Y. 2018-19 became a job work contractor for A.Y. 2019-20. This is again an abnormal phenomenon and against human probability. So, after analysis of all these facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given a categorical finding in respect of each of the parties pertaining to whom the transport expense was disallowed and also the reason for upholding the disallowance. In the course of hearing, we had required the assessee to furnish a comparative chart of transportation expense and to explain the reason for increase in this expenditure, if any, during the year. The assessee has furnished the following comparative details from the annual accounts for the current year and the preceding year: FY 2016-17 2017-18 Sales/services 4,83,68,199 13,54,03,753 Purchases 1,00,99,162 2,85,63,572 Direct Exps Jobwork payment 2,31,29,140 4,46,15,328 Petrol Exp 92,49,635 4,65,69,901 Transport Exps Included in P & L a/c Included in P & L a/c Total 3,23,78,775 9,11,85,229 Transport Exp 5% 3,41,679 75,77,863 10. It is found that transport expense of Rs. 3,41,679/- only was incurred in the preceding year which had increased to Rs. 75,77,863/- in the current year. The assessee has not given any explanation for this exorbitant increase in transport expense during the year. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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