TMI Blog2013 (12) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... h adjudication. Disallowance of expenses - Held that:- In the Remand Report, the Assessee had produced the bills and vouchers and A.O. had failed to identify any single discrepancy - Assessee has shown increased gross profit and net profit as compared to the immediate preceding year - The A.O. has also not pointed out any deficiency in the books of accounts - The Revenue could not controvert the findings of CIT(A) by bringing any contrary material on record - Decided against Revenue. - I.T. A. No. 683 /AHD/2013 - - - Dated:- 31-10-2013 - D K Tyagi And Anil Chaturvedi, JJ. For the Appellant : Shri P L Kureel, Sr DR For the Respondents : U S Bhati ORDER:- PER : Anil Chaturvedi This appeal is filed by the Revenue against the order of CIT(A)-XV, Ahmedabad dated 04.12.2012 for A.Y. 2008-09. 2. The facts as culled out from the material on record are as under. 3. Assessee is an individual engaged in the business of hiring motor car in the name of Sai Travels. Assessee filed its return of income for A.Y. 08- 09 on 30.09.2008 declaring total income of Rs. 3,64,140/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee carried the matter before CIT(A). CIT(A) after considering the submissions of the Assessee decided the issue in favour of Assessee by holding as under:- 5.4 Ground No.3 is in respect of disallowance u/s.40(a)(ia) of the Act for an amount of Rs.28,35,053, since appellant did not comply the provisions of deduction of TDS in respect of payments made for motor hire charges to various sub-contractors. The A.O. made the addition since appellant has not given any explanation or reply in this regard during asstt. proceedings. The appellant during appeal proceedings submitted that he is having business of motor hire mainly for state govt. PSU(i.e.Gujarat State Petroleum Corporation Ltd., Gandhinagar (GSPL), Gujarat State Petronet Ltd. Gandhinagar and GSPC Gas Co. Ltd. The appellant has to deploy the vehicles like Toyoto Qualis, Scorpio, Safari etc. for its staff. Copies of 'work order' received were also attached by appellant which have various terms and conditions. It was conveyed that appellant has his own vehicles (26 vehicles, as per details submitted before A.O. vide written submission dated 13.9.2010) to complete the work contract. It is only on few occasion, when he has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant succeed therefore for the ground related to disallowance u/s.40(a)(ia) of the Act following the ratio of decision of this case. It is therefore, the A.O. is directed to allow hire charges of Rs.28,35,053/- and delete the addition so made u/s.40(a)(ia) of the Act. The appellant gets relief accordingly 5. Aggrieved by the order of CIT(A), Revenue is now in appeal before us. 6. Before us, the ld. D.R. submitted but the Assessee failed to submit the details called for by the A.O. and therefore the A.O. was justified in disallowing the expenditure by invoking the provisions of section 40(a)(ia) of the Act. He further submitted that CIT(A) has granted relief to the Assessee by following the decision of Special Bench in the case of Merlyn Shipping and Transport vs. ACIT . He further submitted that Hon. Gujarat High Court in the case of Sikandar Khan N. Tunvar (2013) 33 Taxman. Com 133 (Guj.) has held that the decision of special bench in the case of Merlyn Shipping and Transport vs. A.C.I.T does not lay down correct law. He therefore submitted that in view of the decision of Hon. Gujarat High Court, the matter may be sent back to the file of A.O. to decide the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f vehicles. Before us, the Revenue could not controvert the findings of CIT(A) by bringing any contrary material on record. In view of the aforesaid facts, we find no reason to interfere with the order of CIT(A) and thus this ground of Revenue is dismissed. Ground No. 2 and 3 are interconnected and therefore we considered together. It is with respect to disallowance of interest payment of Rs. 10,10,258/-. 9. On verification of the details, A.O. noticed that Assessee had paid interest to various Private Finance Companies to the tune of Rs. 10,10,258/-. A.O. was of the view that Assessee should have deducted TDS under Section 194A but had failed to deduct TDS. The Assessee was therefore asked to show cause as to why the interest payment not be disallowed under section 40(a)(ia). In the absence of response from the Assessee, A.O. concluded that Assessee has failed to deduct TDS under section 194A before making payment of finance charges of Rs. 10,10,258/- and accordingly disallowed the same under section 40(a)(ia) of the Act. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A). CIT(A) after considering the submissions of the Assessee decided the issue in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue is now in appeal before us. 11. Before us, the ld. D.R. submitted that Assessee was liable to deduct TDS under section 194A before making payment of interest which the Assessee has failed to do and therefore the A.O. was justified in making the disallowance. He further submitted that CIT(A) has granted relief to the Assessee by following the decision of Special Bench in the case of Merilyn Shipping and Transport (supra). He further submitted that Hon. Guj. High Court in the case of Sikandar Khan N. Tunvar (supra) has held that the Special Bench decision in the case of Merilyn Shipping (supra) does not lay down correct law. In view of the aforesaid decision of Hon. Gujarat High Court he submitted that the order of A.O. be upheld. 12. The ld. A.R. fairly agreed that the matter may be sent back to the A.O. to ascertain the payments of interest made to banks and others and thereafter decide the issue. 13. We have heard the rival submissions and perused the material on record. We find that Assessee had paid interest of Rs. 10,10,258/- to Private Finance Companies including banks. The amount paid as interest to banks and finance companies was not submitted by the Assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm of G.P. N.P. were accepted by A.O. Further no single defect/deficiency in the books of accounts was mentioned by A.O. and therefore there is no reasoning or logic for such disallowance. As discussed in earlier paras, the details in this regard was subjected to remand proceedings on the request of appellant and the A.O. in the remand report after test checking the details viz. ledger, bills, vouchers made a general comment that some of the expenditure are not supported by evidences. The appellant in rejoinder objected such general remarks and shown readiness to produce the supporting evidences for payment of service tax of Rs.66,873 and telephone bill of Rs.32,360. In respect of office expenses of Rs.21,640, it is contended that some tea, coffee expenditure may not be supported by bill due to nature of such expenses but in the absence of A.O. specifying the amount, appellant's better results and audited books of accounts does not warrant any disallowances out of it on estimation basis. I am inclined to accept the contention of the appellant. The A.O. in the asstt. order estimated the disallowance without any reasoning or logic If no evidences to support such expenses were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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