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TMI Blog2016 (6) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... 24/-. 5. That the ld. AO as well as ld.CIT (A) grossly erred in making/sustaining the addition on Vehicle expenses & depreciation thereon Rs. 34,716/-. 2. Brief facts of the case are that the assessee is an individual deriving income from trading of cattle feed and food grain etc. The assessee filed his return declaring income of Rs. 6,35,610/- and agricultural income of Rs. 40,000/- on 21.09.2010 for the year under consideration. Subsequently the return was revised on 25.09.2010 declaring income of Rs. 7,89,270/-. The case of the assessee was scrutinized under section 143(3) of the IT Act and assessment was completed on 28.12.2012 at an income of Rs. 32,61,740/-. 2.1. The AO, during the course of assessment proceedings, on verification of books of accounts and documents produced by the ld. A/R of the assessee, noticed that no TDS was deducted by the assessee on following transactions/freight payments :- i) New M.P. Rajasthan Freight Carrier Rs. 87870/- ii) Ekta Container Goods Carrier Rs. 84160/- iii) Dwarka Transport Rs.217925/- iv) Shri Jain Transport Co., Bhulia Rs.162729/- v) Sharma Freight Carrier Rs.298995/- vi) GRC Ghoman Road Carrier Rs.346550/- vii) Ekt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee's contention that each GR is separate agreement does not hold good in view of specific provision i.e. proviso to section 194C(5) which provides that TDS is deductible, if the aggregate amount of sum credited or paid or likely to be credited or paid exceeds Rs. 50,000/-. In the case of assessee, all the aggregate amounts exceeded Rs. 50,000/-. The assessee's plea that there was no agreement between assessee and transporter is also devoid of any merit. No person will carry out any work (in this case transportation of goods) without any understanding which can be oral or written. Therefore, it is held that the assessee had contractual obligation to pay transportation charges which were clearly covered under section 194C. The assessee took another plea that assessee had Permanent Account Number of the transporters and, therefore, no TDS was deducted as per provisions of section 194C(6). It was seen that the A.O. brushed aside this argument on the plea that the assessee has not submitted any documentary evidence that he was having PAN of these persons at the time of payment/credit of the amount. In my opinion, it is not necessary that any person has to prove by docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods from transporters through clearing and forwarding agents. The AO has made the impugned addition on the assumption that the assessee was having agreement with the transporter for transportation of its goods, was not based on any evidence on record. Therefore, in the absence of any documentary proof to establish that there is an agreement between the assessee and the transporter for carriage of goods, we are not inclined to interfere with the order of the CIT (A) on this issue, which is confirmed." Therefore, the ld. A/R submitted that when section 194C is not applicable then there is nothing to apply section 40(a)(ia). The ld. A/R further submitted that the most of the transporters were having Permanent Account Number much earlier to the agreement entered with the assessee and the assessee has furnished the PANs of the transporters to the assessee. Therefore, the ld. A/R submitted that when PAN is available with the assessee, there is no requirement to deduct TDS and thus section 40(a)(ia) is not applicable. The ld. A/R, therefore, requested to delete the addition. 4.2. On the other hand, the ld. D/R for the assessee supported the order of the AO. 4.3. We have heard rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of assessment proceedings, noted that the assessee has shown household expenses to the tune of Rs. 85,000/-, in addition, his wife has also withdrawn Rs. 6,000/- for household expenses, thus totalling Rs. 91,000/-. The assessee's family consists of four members viz. two adult and two minor school going children. The assessee has not maintained any account regarding household expenses. The AO considering the cost inflation of kitchen expenses, cost of education of two school going children including expenses on books, copies, clothing etc. and social obligations, estimated the household expenses per family member at Rs. 2,500/- per month, which resultantly comes to Rs. 1,20,000/- p.a. for a family of four members. The AO, therefore, after reducing the household expenses declared by the assessee of Rs. 91,000/-, made the addition of Rs. 29,000/- (Rs. 1,20,000 - 91,000/-). 6. Being aggrieved, the assessee preferred appeal before ld. CIT (A), who confirmed the action of the AO by observing as under :- "I have gone through AO's finding and assessee's submission. Estimation of household expenses at Rs. 1,20,000/- for a family of four members including two school going chi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of lower authorities. 10.3. We have heard rival contentions and perused the material on record. The assessee has not maintained any details for usage of telephone/mobile. Therefore, personal use of telephone cannot be ruled out. It will be reasonable to make disallowance @ 10% of the expenses. We therefore restrict the disallowance to Rs. 2833/-. 11. Ground No. 4 relates to disallowance on account of shop expenses. During assessment proceedings, the AO noted that the assessee has debited a sum of Rs. 25,618/- to the Profit & Loss account under the head shop expenses. The AO held that vouchers for the expenses incurred towards shop expenses are not properly maintained, the same are hand written and, therefore, in absence of proper vouchers, the same are not verifiable. Thus the AO made the disallowance of Rs. 5124/- @ 20%. 12. On appeal, the ld. CIT (A) confirmed the disallowance holding that considering the facts of the case and non-verifiable nature of shop expenses, some disallowance cannot be ruled out. Therefore, he considered it reasonable to confirm the disallowance made by AO @ 20%. 13. Now the assessee is in appeal before us. 13.1. The ld. A/R for the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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