TMI Blog2019 (12) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance sustained by the CIT(Appeals) to the extent and allow Ground No. 1 of the assessee s appeal. Disallowance of electricity, power and fuel - as contended that the actual nature of the expenditure is to be seen keeping in view the underlying purpose of incurring such expenditure and not the treatment given in the books of account while booking the said expenditure - HELD THAT:- We are unable to accept this contention of the ld. Counsel for the assessee. The relevant proviso to section 40A(3) is applicable only in the case of payment made for plying, hiring or leasing goods carriages and the benefit of the same, in my opinion, cannot be extended to cover the expenditure incurred on power and fuel irrespective of the nature of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 28.12.2018, whereby he sustained partly the disallowance made by the Assessing Officer under section 40A(3) of the Income Tax Act, 1961. 2. The assessee in the present case is a Company, which is engaged in the business of transportation. The return of income for the year under consideration was filed by it on 30.10.2015 declaring total income of ₹ 2,61,434/-. During the course of assessment proceedings, the Assessing Officer noticed that the payments against the following expenditure were made by the assessee in cash:- Sr. No. Head of Expenditure Amount of expenditure 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reight charges in respect of which payments in cash were made not exceeding ₹ 35,000/- in any single case. Accordingly by relying on the proviso to section 40A(3), he held that the disallowance to that extent made by the Assessing Officer was not sustainable. As regards the balance amount of car hire charges disallowed by the Assessing Officer under section 40A(3), the ld. CIT(Appeals) found that there were four bills aggregating to ₹ 1,03,500/- where the amount of bill as well as the payment made by the assessee in cash was exceeding ₹ 20,000/-. He accordingly restricted the disallowance made by the Assessing Officer on account of car hire charges to the extent of ₹ 1,03,500/-. As regards the electricity, power and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,51,300/- under section 40A(3) of the Income Tax Act, 1961. (3) The ld. CIT(A) erred in disallowing payments made in excess of ₹ 20,000/- to a single person in a day in cash without considering the bill amount. 4. I have heard the arguments of both the sides and also perused the relevant material available on record. As regards the issue raised in Ground No. 1, I find merit in the contention raised by the ld. Counsel for the assessee that the nature of expenditure incurred by the assessee under the car hire charges, which is disallowed by the Assessing Officer under section 40A(3) and sustained by the ld. CIT(Appeals) to the extent of ₹ 1,03,500/- is such that the same is covered by the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion, cannot be extended to cover the expenditure incurred on power and fuel irrespective of the nature of such expenditure or the nature of the assessee s business. I, therefore, find no merit in Ground No. 2 raised by the assessee in this appeal and dismiss the same. 6. As regards the issue raised in Ground No. 3, the ld. Counsel for the assessee has contended that going by the language of sub-section (3) of section 40A as well as the legislative intention behind making amendment in section 40A(3) with effect from 1st April, 2009, the amount of each bill or the instance of expenditure incurred by the assessee is to be taken into consideration and if such amount does not exceed the limit specified, disallowance under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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