TMI Blog2015 (10) TMI 2368X X X X Extracts X X X X X X X X Extracts X X X X ..... ue.- Decided against revenue. Disallowance of conveyance, telephone, advertisement and general expenses - CIT(A) allowed part relief - Held that:- The percentage of conveyance and telephone expenses claimed against the turnover has increased while the turnover has declined as compared to previous assessment year. Therefore, the disallowance of conveyance expense is restricted to 10% of ₹ 2,17,006/- depreciation has not been included in this disallowance. This results in a confirmation of disallowance from conveyance expenditure of ₹ 21,700/-. Similarly, the disallowance on account of telephone expenses is restricted to 10% of the claim resulting in a confirmation of disallowance of ₹ 14,340/-. Regarding the advertisement and general expenditure, it is seen that the percentage of expenses have decline since last year and so ad hoc disallowance of ₹ 10,449/- is not sustained under the head advertisement and general expenses - CIT(A) has taken into consideration all the aspects with regard to claim of the assessee as referred in the above Grounds - Decided against revenue. - ITA No. 303/JP/2013 - - - Dated:- 24-9-2015 - SHRI R.P. TOLANI, JM SHRI T.R. ME ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them on hire which was eligible for depreciation @ 30%. The AO after considering the reply of the assessee held that the Hydraulic Crane is a machine and the assessee is eligible for depreciation @ 15% instead of 30% as claimed in the return. Therefore, the AO allowed the depreciation on Hydraulic crane @ 15% and excess depreciation of ₹ 8,09,034/- was disallowed by the AO. 3.3 The assessee preferred first appeal before the ld. CIT(A) who allowed the depreciation @ 30% by following observations at para 4.3 of her order. 4.3 I have carefully perused the order of the AO and the submissions of the A.R. It is pertinent to note that the identical issue was decided by the CIT (A) in the case of partnership firm of the assessee in the case of M/s. Narayani Cranes in assessment year 2008-09 vide her order dated 21- 06-2011, ITA No. 457/10-11 wherein all the submissions were considered and the appeal was allowed in favour of the appellant on identical facts. It was held in the order that there was sufficient evidence to show that the truck crane was used on public road and so it was under the deeming provisions as a transport vehicle vide notification dated 5-11- 2004 S.O. 124 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation @ 30% on Hydraulic Cranes. Hence, Ground No. 1 of the Revenue is dismissed. 4.1 The ground 2 of the Revenue is regarding allowing relief of ₹ 50,000/- out of disallowance of crane operating expenses and wages. 4.2 The AO on perusal of the profit and loss account of the assessee observed that the assessee had claimed ₹ 18,60,539/- under the head crane operating charges. The AO observed that the expenditure for wages payment was made by the assessee in cash and neither supporting bills were available nor any wages registered was maintained to this effect. The AO observed that self made vouchers were available which were not subject to verification. Thus in the absence of primary and proper records, the expenditure incurred under this head could not be verified by the AO. The assessee submitted the reply but the AO did not found it tenable. The AO observed that the assessee was not maintaining proper records for wages and other miscellaneous expenses under the head crane operating charges. Thus in the absence of proper supporting bills and the fact that payment was shown in cash, the expenditure could not be verified by the AO. Considering the facts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of advertisement and general expenses, the AO observed that the assessee has claimed expenditure of ₹ 34,350/- on account of advertisement expenditure and ₹ 17,897/- on account of general expenses. The AO asked the assessee to submit the supporting evidence but the AO found that the assessee did not maintain proper bills and vouchers for such expense. The AO observed that petty cash payments have been made and the AO observed that such expenditures were unverifiable. The AO disallowed 20% of such expenditure which comes to ₹ 10,449/- and added the same to the income of the assessee. 5.3 As regards disallowance of conveyance expenditure of ₹ 2,75,019/- (inclusive of vehicle running expenses of ₹ 1,50,970/- , repairs and maintenance of ₹ 66,036/- and depreciation of ₹ 58,013/-), the AO asked the assessee to produce the details but on examination of the details the AO observed that these expenses are not fully vouched and not supported by proper bills and vouchers. The AO in the absence of primary records held that these expenses are not wholly and exclusively incurred for the purpose of business. Therefore, in order to cover up possible l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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