9911796707
TMI Blog2025 (1) TMI 1058X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim of expenditure raised by the assessee is found to be bogus; (ii) the expenditure is in the nature of a capital expenditure or personal expenditure of the assessee; or (iii) that the expenditure had been incurred for any purpose which is an offence or which is prohibited by law. A.O had failed to place on record any material which would prove to the hilt that the assessee had either raised a bogus claim of expenditure; or that the said expenditure was not incurred wholly and exclusively for the purpose of business; or that the expenditure so claimed as a deduction did not fall within the four parameters of Section 37 therefore, unable to persuade myself to subscribe to the summarily disallowance to the said effect so carried out by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Addl. Commissioner of Income Tax (Appeals) has also ignored this argument of the appellant which he ought to have considered. 4. The learned Addl. Commissioner of Income Tax (Appeals) failed to consider the detailed submissions and evidence presented, including historical data demonstrating the reasonableness of the expenses claimed. 5. The learned Assessing Officer erred in disallowing expenses without bringing any adverse material on record or conducting independent verification as required under the law. 6. The learned Assessing Officer failed to appreciate that all transportation expenses are supported by invoices and payment records and are incurred wholly and exclusively for the purpose of business under Section 37(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) found favour with the contentions advanced by the assessee and vacated the said addition, but at the same time, upheld the disallowance of its claim for deduction of tanker expenses to the extent of 5% (as against disallowance of 15% made by the A.O) of Rs. 2,19,981/- ( i.e. 5% of Rs. 43,99,618/-. For the sake of clarity, the observations of the CIT(Appeals) are culled out as under: "7. DECISION The appellant is an authorized dealer of Bharat Petroleum Corporation Ltd. and is having a Petro Pump. The AO called for the details of expenses incurred in respect of tanker transport payment of Rs. 43,99,618/- and merchant's share at Rs. 64,940/-. According to the AO, in spite of specifically asking the appellant to produce bills and v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In respect of expenses incurred on transport payments, it is difficult to believe that supporting could not be produced. Considering the totality of the facts, 5% disallowance should be sufficed. Accordingly, disallowance of 5% of Rs. 43,99,618/-, which comes to Rs. 2,19,981/- is hereby confirmed. Accordingly, the appeal is Partly Allowed." 5. The assessee firm being aggrieved with the order of the ADDL/JCIT(A), Mumbai has carried the matter in appeal before the Tribunal. 6. The assessee has relied upon the written submissions dated 13.01.2025. Accordingly, in the backdrop of the same, I herein proceed with and dispose of the appeal after hearing the Ld. Departmental Representative (for short 'DR') and perusing the orders of the lower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal) @5% has any logical reasoning. 9. As is discernible from the assessment order, I find that the A.O had not referred to a single instance of expenditure which as per him was either not verifiable; or was not found to be in order; or was not found to have been incurred wholly and exclusively for the purpose of business. Although, the A.O had observed that the assessee had failed to produce the bills and payments vouchers regarding the transportation expenses, but the assessee in his "written submission" had stated, viz. (i) the A.O without calling upon the assessee to show cause that as to why an addition/disallowance of "transport expenses" of Rs. 6,69,683/- (supra) may not be made in its case had most arbitrarily and in violation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee's claim for deduction of the aforesaid expenditure by the lower authorities, the disallowance by the A.O of a part of the assessee's claim for deduction of transport expenses on an ad- hoc basis could by no means be held to be justified. My aforesaid view is fortified by the order of the ITAT, Kolkata in the case of Animesh Sadhu Vs. ACIT, Circle-1, Hoogly, ITA No. 11/Kol/2013, dated 12.11.2014 and that of the ITAT, Delhi in the case of ACIT, New Delhi Vs. M/s Modi Rubber Ltd. ITA No. 1952/Del/2014, dated 15.05.2018. Also, my aforesaid view that an assessee's claim for deduction of an expenditure u/s. 37 of the Act cannot be arbitrarily disallowed by the A.O on a ad-hoc basis is supported by the order of the ITAT, Raipur in the case of M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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