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2021 (9) TMI 221 - AT - Income TaxDisallowance of expenditure on transportation - whether assessee had genuinely incurred the Transportation expenses? - as per AO increase in sales during the year when compared to last year is only 27% whereas freight outward is increased by 210% - CIT-A deleted the addition - HELD THAT:- All the payments made to APK Road Lines are through account payee cheques only. Also TDS has been deducted and paid on the amounts paid to APK Road Carriers by the assessee, and the same is also reflected in the Form 26AS of APK Road Carriers produced before me. Further, receipt of the transportation amount is confirmed by APK Road Carriers and the same is reflected in its income as confirmed by it and the income tax return filed by it, a copy of which is on record. On perusal of the CIT(A)'s order, the CIT(A) has addressed each and every grievance raised by the A.O. in his order as well as in the remand report and came to the conclusion that the expenditure incurred by the assessee on transport is genuine. Therefore, we do not find any infirmity in the order of the CIT(A) in directing the A.O. to delete the disallowance made by the A.O. on account of expenditure on transportation. Accordingly, we dismiss the grounds raised by the revenue on this issue. Addition based on the various loose papers impounded during the Survey proceeding conducted in the business premises of assessee - clandestine removal and unaccounted sales - CIT-A deleted the addition - HELD THAT:- CIT(A)'s categorical finding is that the A.O. during the survey proceedings of the assessee company's business premises have not collected any material from assessee company which indicate unaccounted sales and the loose papers impounded from business premises of M/s. B.S. Transcomm belong to them and assessee company cannot be held responsible for the other company's record and their statement - No reason to interfere with the order of CIT(A) in deleting the addition made by the A.O. on account of unaccounted sales. Revenue ground dismissed. Addition u/s. 40A(2)(a) & (b) - appellant company had made purchases both from related party and unrelated party - AO compared the price of purchase from related party and unrelated party and disallowed as excess payment as provisions of Section 40A(2)(a)&(b) - CIT(A) deleted the addition - HELD THAT:- CIT(A)'s categorical findings are that "the assessing officer erred by comparing prices of two different quality product supplied by M/s. Agarwal Foundries and unrelated parties. AO has not tried to find out the fair market value of the product. The appellant company has also produced the details of sale price of finished product manufactured using higher grade material which fetch extra margins to company. Furthermore, both M/s. Agarwal Foundries and Appellant Company are taxed at maximum rate of tax." Therefore, we do not find any infirmity in the order of the CIT(A) in deleting disallowance u/s. 40A(2)(a) & (b) - Decided against revenue.
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