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2020 (5) TMI 372 - AT - Income TaxDisallowance of certain expenses - HELD THAT:- As seen as an admitted position that all the expenses were not properly vouched. Some of the expenses were recorded even on the basis of information provided orally by the drivers, for which there was no material to back the same. It cannot be said that all the expenses were properly vouched and there was no infirmity in the claim. Taking into consideration the peculiarity of the facts and circumstances obtaining in the instant case, disallowance at 10% as sustained in the first appeal is in order, which does not call for any further interference. This ground is not allowed. Disallowance u/s. 40A(2) - excess freight of ₹ 25/- per ton was paid to related parties - HELD THAT:- Vehicles were dedicated specifically to the assessee in contrast to the outsiders, who were providing vehicles only on request and sometimes such a request was not acceded to as well. Since the vehicles of the related parties remained available round the clock and were dedicated specifically to the assessee, the rate charged by the third party transporters cannot constitute a good base for comparison with the rate of freight paid to the related parties. It is further a matter of fact that all the recipients furnished their returns by including the amount of freight received from the assessee and offered the same to tax - disallowance u/s.40A(2) has been wrongly made and sustained.Therefore, order to delete the addition.
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