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2020 (1) TMI 1341 - AT - Income TaxDisallowance u/s. 40(a)(ia) - HELD THAT:- As is clear from the provisions of Section 40(a)(ia) if the payee had filed the return of income and shown the interest income in the Profit & Loss A/c which is clear from the Form-26A filed by the assessee, which was sent by the CIT(A) to the AO for verification and the Assessing Officer thereafter had submitted the report but simultaneously taken the objection that the said certificate of Form 26A was not filed before the AO The objections of AO before the CIT(A) and before the Ld. DR is technical in nature and once the content of Form-26A were not disputed, then the assessee is entitled to the benefit of proviso to Section 40(a)(ia) of the Act, for that purpose we may fruitfully rely upon the decision of the Hon'ble Supreme Court in the case of CIT Vs. Ansal Land Mark Township (P) Ltd. [2016 (8) TMI 1281 - SC ORDER]. Accordingly, Ground Nos. 1 & 2 raised by Revenue are dismissed. Rejection of book results u/s. 145 - bills/vouchers found to be inaccurate/bogus/excessive - HELD THAT:- Once the books of account have rejected by the Assessing Officer and confirmed by the CIT(A), then, it was incumbent upon both the lower authorities i.e., AO as well as the CIT(A) to physically verify the bills/vouchers of the expenditure and specify the expenditure which in the estimation of both the authorities were excessive or was not related to the business of the assessee or was bogus. Needful was not done by the Ld. CIT(A) and he had reduced the disallowance from ₹ 1 Crore to ₹ 5 Lakhs - we are of the opinion that this issue is required to be remanded back to the file of Ld. CIT(A) with a direction to verify the bills/vouchers and give a categorical finding as to the nature of expenditure incurred by the assessee, which were found to be excessive/bogus etc. While examining the bills/vouchers, pertaining to freight and track running expenses, if the Ld. CIT(A) comes to the conclusion that the expenditure were more than ₹ 1 Crore, then, he will not enhance the disallowance from ₹ 1 Crore to any other amount. In the converse if the Ld. CIT(A) comes to the conclusion that the expenditure (bills/vouchers) pertaining to freight and truck running expenditure were found to be in order, then, no disallowance would be made or the disallowance would be restricted to the actual bills/vouchers found to be inaccurate/bogus/excessive. This exercise would be done by the CIT(A) in accordance with law, after giving due opportunity of hearing to the assessee. It is expected the Ld. CIT(A) shall pass a reasoned and speaking order - Ground No. 3, raised by the Revenue is treated as allowed for statistical purposes. Disallowance from Freight and Truck Repair & Maintenance Expenses - HELD THAT:- CIT(A) had passed a detailed order, after verifying the case record and thereafter had restricted the disallowance to ₹ 1 Lakh instead of ₹ 25 Lakhs. Since the Ld. CIT(A) had verified the record and nothing had been pointed by the Ld. DR that the record which was verified was not sufficient to come to the conclusion or the finding recorded by the Ld. CIT(A) in para 11 was incorrect or contrary to the facts. In the light of the above, we do not find any reason to interfere with the findings giving by the Ld. CIT(A). Depreciation for the trucks - HELD THAT:- Case of the assessee was decided on scrutiny u/s. 143(3) of the Act and no doubt by the AO in the A.Y. 2009-10 in respect of claim of depreciation. The record further shows that the assessee has given the details of the trucks along with Chassis number, which were put to use after being registered with MP State Transport Department. This information was also available on the website of the MP State Transport Department. In our view, for the purpose of claiming the depreciation, the assessee was required to prove that the asset was put to use in the year under consideration. For the purposes of claiming the depreciation for the trucks, it would be sufficient if the trucks were registered with the Transport Authorities before the cut-off date and have a valid petrol/oil receipt showing the consumption of fuel. This had sufficiently been demonstrated by the assessee before the authorities below.
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