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2015 (2) TMI 9 - AT - Income TaxDisallowance of freight and lorry hire charges - Held that:- The assessee had furnished the primary evidence of the transaction but had failed to furnish the confirmation from the said party nor could the said party be produced for cross-examination. The expenditure incurred by the assessee was ₹ 3,12,300/- and though the same has been discharged by making cash payment on different dates, we find merit in the plea of the assessee where, the primary evidence of incurring the expenditure has been filed by the assessee i.e. the lorry receipt numbers, name of consignor, consignee, place of discharge, vehicle numbers, invoice number and date of sale between consignor and consignee; merely because the person could not traced during the course of assessment proceedings and the confirmation from the said party could not be filed does not establish the case of the Revenue that the said expenditure had not been incurred by the assessee. Accordingly, we direct the Assessing Officer to allow the expenditure of ₹ 3,12,300/-. - Decided in favour of assessee. Disallowance u/s 40A(3) - cash payment made on account of freight and lorry hire charges in excess of ₹ 20,000/- in a day - Held that:- Merely because while deducting the tax at source, the assessee had deducted the tax under section 194C of the Act, does not establish the case of the Revenue, especially, in the circumstances where the assessee had claimed that the deduction of tax was made under a wrong section. The payment made for hired vehicles through commission agents was though paid in cash exceeding ₹ 20,000/- falls within the exception provided in clause (k) to the Rule 6DD of the Rules and we find no merit in the orders of authorities below in disallowing the said payment as not allowable under section 40A(3) of the Act. Further in the statement recorded, the Director of assessee company had stated that advance lorry charges were paid in cash to parties. No query was raised as to the persons to whom payments are being made. In the said circumstances, we find no merit in orders of authorities below. Reversing the order of CIT(A), we direct the Assessing Officer to delete the disallowance made under section 40A(3) of the Act at ₹ 64,60,549/- - Decided in favour of assessee.
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