TMI Blog2001 (9) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependently verifiable for the genuineness, etc. The AO, therefore, felt that these expenses were not wholly and exclusively for the purposes of business and he disallowed 25 per cent of such expenses, i.e., an amount of Rs. 84,335. 3. On appeal, the learned CIT(A) has confirmed the addition observing as under: "I have considered rival submissions. I find that the facts are not in dispute. Regarding the expenses not supported by vouchers, there is no other evidence to support the genuineness of the same, whereas the expenses on small repairs such as removing the punctures, washing of the vehicles and miscellaneous repairs are quite likely and inevitable. However, expenses such as payment on account of tips at various stages etc. cannot be accepted to be genuinely having been incurred for the purposes of business, particularly in the absence of any proof thereof. Thus, there is an element of claim which deserves to be disallowed and certain element deserves to be allowed. I find that the AO has been very fair in his approach. Out of the total amount which is not supported by vouchers, he has allowed three times the sum that he has disallowed. Therefore, I find that there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee charges 30 per cent commission in respect of vehicles to which the assessee has supplied tanks owned by the assessee-firm. Secondly, it was not proved before him that the assessee-firm had spare tanks supposed to be mounted on number of chassis which was in serviceable condition and which can be mounted on different chassis. Further, according to the AO, the assessee never proved that it carried out certain activities of supplying tanks for mounting on chassis which are supposed to be very old and therefore, these were not reflected in the books of account of the assessee. In other words, according to the AO, after due investigation with the road transport authorities and after having made available the opinion of the road transport authorities to the assessee for rebuttal, the assessee was not able to prove before him that it had certain tanks which were very old tanks as claimed before him, which were actually mounted on different chassis belonging to outsiders as claimed by the assessee and that the assessee carried out certain repairs to such tanks. In the absence of these details and any evidence, the AO refused to allow any repairing charges on such tanks supposed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 95 ITR 664 (Pat). 10. Shri A.M. Muntode, the learned Departmental Representative, strongly supported the orders of the authorities below. He submitted that the assessee failed to furnish evidence before the authorities below that the tankers belonged to the assessee-firm and that expenses were incurred on the repairs of such tankers and accordingly, the authorities below were justified in disallowing the unproved claim of Rs. 12,75,006. 11. We have considered the rival submissions and perused the facts on record. The assessee-firm owns 6 trucks on which the tankers are loaded for transporting corrosive chemicals. The income arising from these trucks is credited to truck running account. The net income from these 6 trucks is Rs. 13,87,221. In addition to this, the assessee acts as a commission agent for the transport activity. This is of two types: (i) 10 per cent commission is charged in the cases where the truck with the tanker is owned by the truck owner, (ii) 30 per cent commission is charged in cases where the chassis is owned by the truck owner and the tankers belonging to the assessee are mounted on the chassis of the truck owner. The commission received at 10 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of irrecoverable amounts written off. The AO requested the assessee to give details in respect of the amounts and also to show in view of the provisions of s. 36(2) of the Act that these debtors or part thereof had been taken into account in computing the income of the previous year in which the amount of said debts or part thereof were written off. According to the AO, the assessee chose not to prove this fact. He therefore disallowed the claim of the assessee. 13. When the matter came up before the CIT(A), the AO who was present pointed out that the P L a/c of the assessee indicated on the credit side that it is not the gross receipts which are taken to the credit of the P L a/c in respect of 30 per cent commission transaction and in respect of 10 per cent commission transactions. There only the net amount of commission received in the form of credit balance to the tanker running account is transferred to the P L a/c. Similarly, the credit balance of commission account is transferred to the P L a/c. "In other words, the total receipts received or receivable, as claimed by the appellant are not taken to the P L a/c." This factor was verified from the statement of account s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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