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Chandra Brothers Versus Dy. CIT, Range 2, Kanpur

2016 (1) TMI 485 - ITAT LUCKNOW

Disallowance of transportation charges - transportation charges are not open for verification - CIT(A) made disallowance of the entire payment having invoked the provisions of section 40(a)(ia) - Held that:- From a careful perusal of the order of the ld. CIT(A), we do not find any narration with regard to the issuance of notice for enhancement of disallowance. Since the disallowance resulted into enhancement of income, the ld. CIT(A) was required to issue notice of enhancement before enhancing t .....

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icle running expenses - Held that:- The vehicle running expenses were incurred for the business purposes of the assessee-company, therefore, no ad hoc disallowance can be made. Since the assessee is a partnership firm, the element of personal use of vehicle cannot be ruled out. We are, however, of the view that the disallowance of expenditure of ₹ 20,000/- is on higher side. We accordingly reduce the same to ₹ 10,000/-.

Addition under the head ôrepair and maintenance and b .....

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expenditure, onus is upon the assessee to prove its genuineness. Self-made vouchers for entire expenses will not serve the purpose. We are accordingly of the view that the Revenue has rightly made the disallowance having concluded that the bills and vouchers maintained for repair and maintenance expenses are not open for verification. Accordingly we confirm the order of the ld. CIT(A).

Nature of sale of land - computation of capital gain - agricultural land - Held that:- Once the lan .....

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the location of the land cannot be verified. We are accordingly of the view that the ld. CIT(A) has rightly disallowed the claim of the assessee in the given facts and circumstances. Accordingly we confirm his order on this issue. - ITA No.455/LKW/2013 - Dated:- 3-11-2015 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. A. K. GARODIA, ACCOUNTANT MEMBER For The Appellant : Shri. Rakesh Garg, Advocate For The Respondent : Shri. Amit Nigam, D.R. ORDER PER SUNIL KUMAR YADAV: This appeal is prefer .....

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filed by the appellant were not adequate or explanatory, as desired by him. 3. Because the Ld. CIT (Appeals) has erred on facts and in law in not considering the explanation as filed by the assessee and has arbitrarily concluded that the order passed by the Assessing Officer is in accordance to law. 4. That the Ld. CIT (Appeals) has erred in law and on facts in not considering the facts of the case and in enhancing ₹ 4826524/- from ₹ 200000/-out of transportation charges u/s 40(a)(i .....

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cts in confirming an adhoc disallowance of ₹ 250000/- out of repair and maintenance expenses. 8. That the Ld. CIT (Appeals) has erred in law and on facts in treating sale of agriculture land to be a non-agricultural land and confirming an addition of ₹ 1563000/- on this account. 9. That the Ld. CIT (Appeals) erred in law and on facts in not properly looking into the facts of brought forward loss and observing that the issue has already been considered by the A.O. U/s 154 in as-much-a .....

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d. CIT(A) asked the assessee to justify the expenses claimed under the head transportation charges . In response thereto, the assessee has filed a letter dated 18.2.2013 wherein it was stated that the assessee has entered into an agreement with M/s Somdutta Builders Ltd. for transportation of gitti from their storage destination to the site of the constructions of National Highways Projects. The assessee has taken trippers or dumpers only for transportation of such material and the drivers deplo .....

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ansportation charges along with four photocopies of the drivers bill each amounting to ₹ 10,000/- per month were filed. The assessee was asked to produce the bills along with ledger and vouchers but it was not filed before the ld. CIT(A) despite various opportunities and the ld. CIT(A) thereafter concluded that the required TDS has not been deducted on the payment of transportation charges of ₹ 48.26 lakhs. Accordingly he invoked the provisions of section 40(a)(ia) of the Income-tax .....

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sportation of material pursuant to the agreement, he was not required to deduct TDS. Therefore, no disallowance under section 40(a)(ia) of the Act is called for. 6. The ld. D.R., on the other hand, has submitted that the ld. CIT(A) has afforded sufficient opportunity to the assessee to justify the transportation charges by placing relevant evidence, but the assessee could not file the same and the ld. CIT(A) has accordingly made disallowance of ₹ 48.26 lakhs having invoked the provisions o .....

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A), the ld. CIT(A) has examined the issue having given opportunity to the assessee to produce the relevant evidence, but the assessee could not place sufficient evidence to justify the expenses and its claim of non-deduction of TDS. The ld. CIT(A) accordingly made disallowance of the entire payment of ₹ 48.26 lakhs having invoked the provisions of section 40(a)(ia) of the Act. 8. From a careful perusal of the order of the ld. CIT(A), we do not find any narration with regard to the issuance .....

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ce of enhancement of disallowance to the assessee and thereafter readjudicate the issue after affording an opportunity of being heard to the assessee. 9. Apropos ground No.5, it is noticed that the assessee has claimed vehicle running expenses of ₹ 1,41,292/- and out of this amount, the assessee has paid FBT of ₹ 38,938/- and the remaining amount of ₹ 1,02,534/- was not verifiable, as the payments were made through self-made vouchers, therefore, disallowance of ₹ 20,000/- .....

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000/- is on higher side. We accordingly reduce the same to ₹ 10,000/-. 12. Apropos ground No.6, it is noticed that during the course of assessment proceedings, the Assessing Officer found that interest of ₹ 57,50,617/- is debited to the profit and loss account and on verification of details, the Assessing Officer has found that the assessee has charged interest @ 10% but has paid interest @ 10 to 12%. Further, the assessee has made investment of ₹ 1,41,980/- in shares of the si .....

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sessee is before the Tribunal, but no evidence is filed to justify that this investment was made out of surplus funds. Since the assessee has made payment on borrowed funds, disallowance @ 10% on investment in sister concern was rightly made by the ld. CIT(A). Accordingly we confirm the order of the ld. CIT(A) on this issue. 15. Apropos ground No.7, it is noticed that the assessee has debited ₹ 60,25,774/- under the head repair and maintenance and bills and vouchers for the same were self- .....

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course of hearing, the ld. counsel for the assessee has reiterated the submission that the books of account of the assessee are duly audited and all expenses are verifiable. 18. The ld. D.R., on the other hand, has submitted that the assessee has not filed any evidence to justify the expenses, only self-made vouchers were made as noted by the Assessing Officer during the course of assessment proceedings. Therefore, onus is upon the assessee to prove the genuineness of the claim of expenditure i .....

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ince the assessee has made a particular claim of expenditure, onus is upon the assessee to prove its genuineness. Self-made vouchers for entire expenses will not serve the purpose. We are accordingly of the view that the Revenue has rightly made the disallowance having concluded that the bills and vouchers maintained for repair and maintenance expenses are not open for verification. Accordingly we confirm the order of the ld. CIT(A). 20. Apropos ground No.8, it is noticed that the Assessing Offi .....

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within 8KM of the municipal limit, therefore, the land cannot be categorized as agricultural land. Accordingly, he calculated the long term capital gain at ₹ 15.63 lakhs. 21. Aggrieved, the assessee preferred an appeal before the ld. CIT(A) with the submission that the land is situated outside 8KM of the municipal limit. Therefore, no capital gain can be charged on this transaction, as the land is an agricultural land. The ld. CIT(A) was not convinced with the contention of the assessee a .....

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and is outside the limit of 8 KM from the municipal limit of Kanpur. Thus, no capital gain can be computed on the transaction of the said agricultural land. 23. The ld. D.R. has submitted that in order to ascertain the location of the land, the Assessing Officer has called a report from the Tehsildar and the Tehsildar has categorically stated that the impugned land is situated within 8KM from the municipal limit of Kanpur and having relied upon the report of the Tehsildar, the Assessing Officer .....

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