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2018 (4) TMI 998 - AT - Income TaxDisallowance u/s. 40A(3) - payment to each Trucker, i.e., for each consignment, on any single day, exceeded the prescribed threshold limit - payment shown as made in installments - Held that:- The assessee’s claim that the payment has been made, in each individual case, over the time actually taken to effect delivery (for that consignment), valid in principle, would require being proved by it. This is as it is untenable and nobody’s case that a truck is held up, i.e., after delivery, only to enable discharge of the balance amount in installments, so as to eschew section 40A(3). The arrival of a truck at the assessee’s site or, as the case may be, point/station from where it is routed to its destination, co-opting assessee’s employee in crew (to oversee delivery and make payments in cash installments); its journey across varies tolls/octroi posts/check points on the way; arrival at its’ destination (and weighment - gross and tare); unloading at site; journey back to the assessee’s premises/work station, etc. would all stand to be evidenced. Subject to this factual verification, we approve the assesee’s claim, i.e., in principle. The burden to prove its’ return, and the claims preferred thereby, is only on the assessee (CIT v. Venkataswamy Naidu - (1956 (2) TMI 3 - SUPREME Court). AO shall, accordingly, adjudicate the matter, issuing definite findings of fact, on the basis of the material on record, and after allowing the assessee a reasonable opportunity to substantiate its’ case. Disallowance being 1/7th of the total expenditure under several heads of expenditure, viz. entertainment; langer; festival expenses; labour welfare; etc., incurred in cash and supported by self-made vouchers - Held that:- We find some merit in the case of either party. An expenditure does not become un-genuine merely because it stands incurred in cash. At the same time, cash expenditure per self-made vouchers is not amenable to verification. The two considerations are to be balanced, and the Revenue’s case, as we understand, is one of inflation (of expenditure), which it estimates at 1/7th of the total expenditure. We direct it at 1/10th, and the Revenue gets part relief. Disallowance at the rate of 1/5th of expenditure on vehicles, viz. repair and maintenance, depreciation, etc., on account of personal, i.e., non-business user, which could not be denied in the absence of log records - CIT(A) has reduced it to 1/10th - no cause for interference.
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