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Frontline Corporation Ltd. Versus Deputy Commisioner of Income Tax Circle-4, Ahmedabad

2015 (10) TMI 1620 - ITAT AHMEDABAD

Disallowance of expenses relating to diesel and trip bhatta - as per assessee as in A.Y. 2010-11, the CIT (A) has sustained the disallowance at 1.11% and therefore, in the year under appeal the disallowance should be scaled down to1.11% of the total expenditure - Held that:- We find that in the Assessment Year 2010-11, the CIT (A) given a finding that the ratio of expenditure to transport income has come down from 62.47% to 52.39% and the gross profit has also increased to 37.53% and 47.61%.

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ini, AM And S. S. Godara, JM,JJ. For the Appellant : Shri P F Jain For the Respondent : Shri Dinesh Singh, Sr.DR ORDER Per N S Saini, Accountant Member This is an appeal filed by the assessee against the order of the CIT (A)-VIII, Ahmedabad dated 4-7-2011. 2. Ground No.1 of the appeal reads as under:- "1. The Ld. CIT (A) has erred in law and on facts in upholding the disallowance of ₹ 13,82,433/- from the expense relating to diesel and trip bhatta without properly appreciating the fac .....

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e the disallowance of ₹ 41,47,300/-. 4. On appeal, the CIT (A) restricted the disallowance to ₹ 13,82,433/- being 1/3rd of the disallowance made of ₹ 41,47,300/- and deleted the balance amount of ₹ 27,64,867/- by following the decision of the Tribunal in the case of assessee itself in I.T.A.No.2226 & 2527/Ahd/2007 for Assessment Year 2003-04. 5. The only argument of the assessee is that in A.Y.2010-11,the CIT (A)-II, Ahmedabad vide his order dated 27-1-2015 had restri .....

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hand, Departmental Representative supported the orders of the lower authorities. 7. We have heard the rival submissions, perused the orders of the lower authorities and materials available on record. The undisputed facts of the case are that the A.O. disallowed 10% out of the total expenditure incurred on diesel of ₹ 299.93 lacs and on trip and bhatta of ₹ 114.80 lacs by following his order of the earlier years and thereby made addition of ₹ 41,47,300/- to the income of the ass .....

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f the Tribunal in the assessee's own case for A.Y.2004-05 dismissed the appeal of the Revenue by observing as under:- "At the outset, we would like to reiterate that similar issues to that of the issues - ground Nos.2 and 3 under consideration have cropped up before the earlier Bench of this Tribunal in the assessee's own case for A.Y. 2004-05 cited supra. After due consideration of the issues as deliberated upon therein, the findings recorded by the Hon'ble earlier Bench are ex .....

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efore the A.O./Ld. CIT (A) and even before us while there is no justification for disproportionate increase in expenditure vis-a-vis expenditure incurred in the preceding years. Therefore, the Ld. CIT (A), considering the fact that input cost has gone up due to rise in diesel prices and other inflation cost, observed that current year operational results are found to be different from the preceding year. Taking into considering the fact that most of the freight rates were on rate contract basis .....

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. In these circumstances, especially when neither the ld. AR nor the Ld. DR referred us to any material so as to enable us to take a different view in the matter while undisputedly facts relating to the year under consideration are different from the facts obtaining in the preceding years as noted by the ld. CIT (A), we are not inclined to interfere. Thus, ground No.1 in the appeal of the assessee and ground No.1 in the appeal of the revenue are dismissed." 6.1. In conformity with the findi .....

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