ADITYA TRACTORS,RAJKOT vs. INCOME TAX OFFICE WARD1(1)(1), RAJKOT

Brief facts qua the issue are that the assessee firm has filed its return of income for AY 2018-19 on 28.09.2018 declaring total income at Rs.3,33,444/-. Subsequently upon verification and comparison of return of income with that of tax audit report it was observed that as per clause 21(b) of the tax audit report there was disallowance of the interest paid of Rs.1,71,051/- to India Bulls Housing Finance Ltd, for mortgage loan and upon verification of trading account submitted along with tax audit report it was also observed that assessee firm had paid transportation expenses of Rs.2,10,706/-. Hence, on above basis intimation order u/s. 143(1) of the Act dated 17.06.2019 was generated by DCIT, CPC, Bengaluru by disallowing total amount of expenses of Rs.3,81,757/- (Rs.1,71,051 + Rs. Rs.2,10,706). As the assessing officer (CPC) disallowed the transportation expenses of Rs.2,10,706/-. On appeal by the assessee, the learned CIT(A) also disallowed the transportation expenses of Rs.2,10,706/-, therefore, assessee is in appeal before this Tribunal.

I have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. In this case, as per the statement of facts, grounds of appeal and submissions by the assessee it is observed that an intimation u/s 143(1) was processed on 17.06.2019 by ADIT, CPC, Bengaluru, wherein disallowance of Rs.2,10,706/- for transportation expenses u/s 43B of the Act was made, which was confirmed by the learned CIT(A) also. I note that in tax audit report of the assessee- firm, there is no any disallowance regarding transportation expenses of Rs.2,10,706/- Page 3 of 4 & 352/Rjt/2024 Aditya Tractors vs. ITO u/s.43B of the Act. All transportation charges were paid during the year only through banking channel. The assessee submitted Form No.3CD and ledger account for each and every creditor for the transportation charges. I also note that Auditor has wrongly mentioned the figure in the audit report and later on the assessee has submitted rectified copy. After considering the submissions of learned DR for the Revenue and learned Counsel for the assessee, and after verification tax audit report, I have noted from tax audit report of the assessee -firm that there is no any disallowance regarding transportation expenses of Rs.2,10,706/- u/s 43B of the Act. I have also noted that all the transportation charges were paid by the assessee -firm, during the year, only through banking channel. To ascertain this fact, I have also examined, Form No. 3CD and ledger account of each and every creditor for the transportation charges, and find that expenses claimed by the assessee, is genuine. Based on this factual position, I delete the addition of Rs.2,10,706/-.