METCO ENTERPRISES P. LTD,MUMBAI vs. DCIT 10(2), MUMBAI

The present appeal has been filed by the assessee against the order passed by learned CIT(A) 21, Mumbai dated 05-11-2014 for A.Y 2011-12 on the following grounds:-

It is noticed that inspite of service of notice, none appeared on behalf of the assessee. Therefore, we proceed to dispose of the revenue’s appeal after hearing the ld.DR and perusing the material available on record on merits of the case.

Brief facts of the issue are that the assessee is a trader, importer and exporter of minerals and chemicals. The assessee has also a specialized transport division engaged

The AO further found that during the assessment proceeding the assessee company has debited an amount of Rs.5,71,88,942/- to its P & L A/c. under the head Motor Lorry ( Running & Maintenance). Before him the assessee submitted that motor lorry expenses were wholly and exclusively incurred for the purpose of business duly supported by evidences/vouchers. AO made a disallowance of Rs.10 lakhs. However, the various submissions of the assessee on its claim was not considered by the AO. And the depreciation claimed @ 7.5 amounting to Rs.1,00,353/- was disallowed/added back to the total income of the assessee on the plea that the purchases of materials used for constructing tanks were non genuine. The AO has also disallowed an amount of Rs.10,00,000/- from motor lorry expenses.

Aggrieved by such order of the AO the assessee preferred appeal before the ld.CIT(A), who after considering the various submissions of the assessee confirmed the disallowance on depreciation to the extent of @ 25% and also confirmed Rs.7,50,000/- out of motor lorry expenses being not genuinely incurred for the purpose of business.

Aggrieved by such order of the ld.CIT(A) in confirming the same, now the assessee is in appeal before us by raising/submitting the abovementioned grounds.

We have heard the ld.DR and perused the material available on record. We find that the assessee is a trader, importer and exporter of minerals and chemicals. For transportation of goods the assessee used its own vehicles/hired vehicles. We further find that for the purchases of goods the payments were made through banking channel. The assessee has also furnished necessary bills/vouchers in support of its claim. However, based on an information of the sales tax authorities he made/disallowed the impugned additions. The ld.CIT(A) has also confirmed the same by 25% depreciation and by Rs.7,50,000/- towards motor lorry expenses. Considering the facts of the case we restrict the depreciation @ 10% as against 25% by the ld. CIT(A) and Rs.5,50,000/- as against Rs.7,50,000/- by the ld. CIT(A) towards disallowance made on a/c motor lorry expenses. These grounds of assessee’s appeal are partly allowed. The assessee gets part relief.

In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 05-08-2016