Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (3) TMI 759 - ITAT RAJKOTDisallowance of Transport expenses for want of evidence or details - HELD THAT:- Assessee has entered into hire contract agreement with the said JC&CO which inter alia provided that the said JC&CO would provide truck at a monthly rent and the total expenses of all the trips shall be incurred by the JC&CO by debiting the same to the account of the assessee, and that the assessee shall provide advance to the drivers of trip during the trip. The said agreement also provided that whatever rent and expenses paid by the assessee would be credited to his account, and the net amount would be paid after deducting the commission. This agreement demonstrates that there was an understanding between two parties as to the operation, maintenance and payment of commission, therefore, the claim of the assessee cannot be doubted or disbelieved. Assessee also filed copy of ledger account of the assessee in the books of JC&CO and copy of logbook showing details of various trip undertaken by the assessee. Payments made by the assessee are identifiable with the details furnished before us and also before the ld.CIT(A). It is pertinent to observe here that similar claim of the assessee was allowed by the Revenue for the earlier year, which fact has not been denied by the Revenue authorities. No sincere efforts have been put in by the ld.CIT(A) to examine the claim of the assessee, though requisite details were placed before him. After considering the facts and circumstances of the case in totality, supported by the evidences submitted by the assessee, we find that action of Revenue authorities in disallowing the claim of the assessee for transport expenses cannot be sustained. We, therefore, reverse their orders, and allow this ground no.1 of assessee appeal. Income from house properties OR business income - AO was of the view that since no proof of business activities being carried out at these premises were furnished by the assessee therefore, the assessee would not have kept the properties idle, he would have earned some income in the form of rent etc., which the assessee would have received in cash or in cheque as unaccounted money - AO accordingly estimated reasonable market rentable value of the properties and estimated income - HELD THAT:- AO was expecting that the assessee should produce some secondary evidence in the shape of letter head, electricity bills showing that the premises were used for the purpose of business. To our mind, these reasoning are fallacious. The assessee has been pleading that premises has been used for business purpose. AO should have deputed someone to inspect the sites. By simply sitting in the office, he just assigned the reason that I don’t agree with your submission. This type of simple denial of the claim is not sustainable in the eyes of law. The statement of facts made by the assessee has to be rejected on the basis of some investigation. AO has rejected the statement of facts on the ground of insufficiency of evidence produced by the assessee. To some extent for an ideal situation, the assessee could be asked to produce more evidence, but pleadings cannot be rejected simply for insufficiency without investigating or inspecting site in such circumstances. We have accepted the claim of the assessee that it has been engaged in transportation business. We have allowed transportation expenses. Considering this aspect, we are of the view that the ld.Revenue authorities are not justified in rejecting the claim of the assessee that house properties were used for the purpose of business. This claim was rejected without making any investigation. Therefore, we reverse the finding of both the authorities and direct the AO not to assess house property income. Disallowance of Interest expenditure on borrowed funds claimed - HELD THAT:- Both the assessees were engaged in transportation business. They have earned professional receipts from transport business. Both the assessees were partners in the firms. They have earned share of profit from the partnership firms as well as interest income. The ld.CIT(A) has also accepted partly this pleading of both the appeals. Considering the above facts, once it is accepted that they were partners in the firm and they have income which is to be assessed as business income, then all consequential expenditure pertaining to this business are to be allowed. Taking this fact in mind, we are of the view that interest expenses claimed by both the assessees are relating to their professional activities or to the funds deployed with the partnership firms. Therefore, the expenses are to be allowed to both the assessees. We allow this ground of appeal and delete disallowances.
|