TMI Blog2010 (3) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... made under section 40A(3) of the Act deleted Disallowance of parking expenses incurred – Held that:- Assessee could not give any satisfactory explanation as to why the assessee made the payment of parking expenses when the trucks were owned by others and not by the assessee - no justification could be given for making such payment only at the Chennai branch when no such payment is being made at the head office or other branches - claim of truck expenses is only on notional basis, i.e., on the basis of per trip and not on the basis of actual parking expenses incurred by the truck owner – disallowance upheld - IT APPEAL NO. 2621 (AHD.) OF 2005 - - - Dated:- 31-3-2010 - G.D. AGARWAL AND BHAVNESH SAINI, JJ. Dhiren Shah for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in a day is to be considered. However that would be applicable from the assessment year 2009-10 and not to the year under appeal which is the assessment year 2002-03. He therefore submitted that the payment made by the assessee below Rs. 20,000 is out of the purview of section 40A(3). He alternatively submitted that even otherwise, the payment made to the driver is covered by rule 6DD( g ) of the Income-tax Rules, because the payment is made to the driver who does not have a bank account in the village or town where payment is made. 4. The learned Departmental representative on the other hand stated that when the bill of the transportation charges was above Rs. 20,000, the assessee has shown the payment below Rs. 20,000 just to avoid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a sum exceeding Rs. 20,000 otherwise than by an account payee cheque or account payee bank draft. Thus, section 40A(3) refers to each payment. It is only after the amendment by the Finance Act, 2008, the aggregate payment made to a person, in a day is to be considered. Section 40A(3), as it stood prior to the amendment by the Finance Act, 2008 was interpreted by the Hon ble Orissa High Court in the case of Aloo Supply Co. ( supra ). Their Lordships held as under (headnote) : "Therefore, if an assessee makes payments at different times during the day and he has no idea that he has to pay to the same person on more than one occasion, he cannot be subjected to the statutory provision contained in section 40A(3) of the Act, unless any on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in violation of section 40A(3). When the genuineness of the transportation work done and the payment made for such work as a whole is not doubted, in our opinion, there is no justification to ignore the self made vouchers by which the payment is made. As per the self-made voucher, payment was below Rs. 20,000 at a time, in respect of such payment the decision of the hon ble Orissa High Court, in the case Aloo Supply Co. ( supra ) would be squarely applicable. Respectfully following the case, we delete the disallowance made under section 40A(3) of the Act. Accordingly, ground No. 1 of the assessee is allowed. 8. Ground No. 2 of the assessee reads as under : "The learned Commissioner of Income-tax (Appeals) erred in fact and in law i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the material placed before us. Learned counsel for the assessee could not give any satisfactory explanation as to why the assessee made the payment of parking expenses when the trucks were owned by others and not by the assessee. Moreover, no justification could be given for making such payment only at the Chennai branch when no such payment is being made at the head office or other branches. The claim of truck expenses is only on notional basis, i.e., on the basis of per trip and not on the basis of actual parking expenses incurred by the truck owner. Considering the totality of the above facts, we do not find any justification to interfere with the order of the lower authorities on this point, the same is upheld, ground No. 2 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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