GUJARAT GOODS SERVICE,MUMBAI vs. ITO-17(1)(5), MUMBAI

This appeal is filed by Gujarat Goods Services (the assessee/ appellant) against the order passed by learned Commissioner of Income-tax (Appeals)-28, Mumbai for A.Y. 2014-15 on 9th December, 2019. The assessee has raised solitary ground in the appeal with respect to the confirmation of disallowance of ₹17,63,743/- of various expenditure on adhoc basis at the rate of 5% of disputed expenditure of ₹ 3,52,74,858/-.

Assessee has raised following ground of appeal:-

Brief fact of the case shows that assessee is a partnership firm, who filed its return of income on 28th November, 2014 declared income of ₹16,03,920/-. Assessee is engaged in the business of transportation through its own vehicles and also by hiring of other vehicles. The case of the assessee was picked up for scrutiny. The assessee was asked to submit the details of various expenditures such as Hamali, road delivery charges, unloading, local tempo, repair expenses, office expenses, office rent and Trip expenses. Assessee did not appear in response to show cause notice dated 23rd December, 2016 and therefore, the learned Assessing Officer assumed that assessee

Assessee aggrieved with that order preferred an appeal before the learned CIT (A). The learned CIT (A) asked for the remand report by the learned Assessing Officer on submissions made by the assessee. During the course of remand proceedings, assessee submitted the ledger account along with sample bills and vouchers. In the remand report, the learned Assessing Officer submitted that most of the expenses are made in cash and on self made vouchers. During the remand proceedings, the assessee was asked to produce the details of parties along with complete addressand Permanent Account Number. The assessee submitted that the expenses are very small in nature and no further details can be provided. However, the expense incurred through Goods Transport Labour Board was confirmed under Section 133(6) of the Act. Such expenditure are to the tune of ₹70,75,604/-. Therefore, the learned Assessing Officer stated that 15% of the balance expenditure i.e. ₹4,23,50,462/- – (minus) ₹75,70,604/- may be confirmed. The assessee submitted that considering the nature of expenses which are generally incurred in cash, invoices of the same are not

Assessee is still aggrieved with the above order and has preferred the above appeal.

The learned Departmental Representative supported the orders of the lower authorities.

We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that assessee is in the business of goods transport operator and has incurred various expenditure. The learned Assessing Officer noted that total ₹4,23,53,462/- has been incurred by the assessee on various transportation

In the Result, the appeal of the assessee is allowed.