DCIT, CHENNAI vs. M/S. MARUTI TRANSPORTS PVT. LTD., CHENNAI

The first ground raised in the appeal of the Revenue is with regard to disallowance of commission of ₹. 5,65,900/- by the Assessing Officer. The assessee has claimed commission and brokerage payment of ₹.28,29,493/- in its return of income. When the assessee was asked to furnish proof of payment, the assessee has produced self made vouchers. Vide letter dated 12.03.2015, the assessee has submitted before the Assessing Officer that commission/brokerage was paid to individual lorries to various agencies. It was also submitted that since there exists no principal-agent relationship, the commission payment made are outside the provisions of section 194H of the Act and not applicable. However, no proper proof for payment of the commission was furnished, the Assessing Officer disallowed 20% of the commission and brokerage of ₹.28,29,493/- claimed by the assessee and brought the same to tax.

On appeal, after considering the submission of the assessee, the ld. CIT(A) has observed that since the Assessing Officer has not doubted the genuineness of the expenditure and moreover, the expenditure was incurred in relation to lorry booking agents with whom the assessee does not have a principal-agent relationship, the disallowance made by the Assessing Officer was deleted.

We have heard both sides, perused the materials available on record and gone through the orders of authorities below. When the Assessing

The next ground raised in the appeal of the Revenue is with regard to disallowance of loading and unloading charges to the tune of ₹.17,25,750/- made by the Assessing Officer. The assessee has explained before the Assessing Officer that these payments were made on behalf of their customer, namely, Midas Golden Distilleries Pvt. Ltd., for unloading the goods at various TASMAC Depots, and that they were recovered as reimbursement along with lorry hire charges from their customer. Copies of invoices issued to their customer along with the related communication in this regard were furnished in support of their contention before the Assessing Officer. However, the Assessing Officer was of the opinion that the assessee tries to deviate from section 40(3) of the Act by making vouchers of less than ₹.35,000/-. By not accepting the explanation given by

On appeal, after considering the submission of the assessee, the ld. CIT(A) has observed that since the Assessing Officer has not doubted the genuineness of the expenditure and moreover, on verification of the details in the invoices raised by the assessee, he has noticed that unloading charges have been recovered from the customer at a fixed rate on per case basis. Moreover, there appears to be no evidence brought on record by the Assessing Officer to support his view that the assessee tried to deviate from the provisions section 40A(3) Act. Therefore, the ld. CIT(A) deleted the disallowance of ₹.17,25,750/ -.

We have heard both sides, perused the materials available on record and gone through the orders of authorities below. When the Assessing Officer has not doubted the genuineness of the expenditure, the Assessing Officer has not recorded any valid reason to state that the assessee tried to deviate from the provisions section 40A(3) Act. Further, on verification of the details in the invoices raised by the assessee, the ld. CIT(A) has noticed that unloading charges have been recovered from the customer at a fixed rate on per case basis. Under the above facts and circumstances, we are of the considered opinion that the Assessing Officer has no valid ground to make

The next ground raised by the Revenue in its appeal is with regard to deleting the disallowance of repairs & maintenance expenses claimed by the assessee at ₹.23,90,134/-. On verification of details furnished by the assessee, the Assessing Officer has observed that the assessee has entered into a contract with Meenakshi Industries, whereas, the payments were made to Meenakshi Trading Company. Thus, the Assessing Officer disallowed the entire expenses and brought the same to tax.

On appeal, after considering the submissions of the assessee, the ld. CIT(A) deleted the disallowance.

We have heard both sides, perused the materials available on record and gone through the orders of authorities below. The assessee is a goods transport operator with more than 90 vehicles and claimed repairs and maintenance expenses on vehicles at ₹.23,90,134/-. The Assessing Officer made the disallowance on the ground that the assessee has entered into a contract with Meenakshi Industries, whereas, the payments were made to Meenakshi Trading Company. It was the submission of the assessee before the ld. CIT(A) that the payments made to Meenakshi Trading/ Meenakshi Agencies were towards body building of the chassis acquired from TVS

From the orders of authorities below, it is not clear as to whether the assessee has accounted the new body building charges under Repairs and Maintenance and claimed the expenses. If is so, the balance amount of ₹.40,134/- [₹.23,90,134- 23,50,000/-] would be very reasonable expenses towards maintenance and repairs of vehicles of the assessee. The ld. CIT(A) has given a finding that the expenses with regard to repairs and maintenance are reasonable and found to have been reduced in the financial year under consideration as compared to the preceding financial year. The Assessing Officer has not given any findings over new body building expenses incurred by the assessee or that would have been included under repairs and maintenance charges claimed by the assessee. Under the above facts and circumstances, we direct the Assessing Officer to verify the repair and maintenance expenses as to whether the new body building expenses have been included in the expenses claimed under

In the result, the appeal of the Department is partly allowed for statistical purposes. Order pronounced on the 28th July, 2017 at Chennai.