SHRI RAMESHWAR MULJI JOGI,AHMEDABAD vs. ASSTT. COMMISSIONER OF INCOME TAX(OSD) CIRCLE-9, AHMEDABAD

The assessee has raised eight grounds of appeal but the sole grievance involved therein against the order of ld. CIT(A) is for

Briefly stated facts as culled out from the records are that the assessee is an individual engaged in the transportation business. E- return of income declaring total income of Rs.20,74,690/- was filed on 29.09.2011. The case selected for scrutiny and a notice u/s. 143(2), 142(1) of the Act was duly served upon the assessee. Ld. AO completed assessment after making disallowance of Rs.70,000/- u/s.40A(3) of the Act and also disallowance of 25% of the vehicle repairing expenses of Rs.78,69,771/- for lack of necessary documents and inability of the assessee to prove the expenditure and thereby making disallowance of Rs.19,67,443/-. Accordingly, after making additions/disallowances of Rs.20,37,443/- income assessed at Rs.41,12,133/-.

Aggrieved assessee before appeal before ld. CIT(A) against the disallowance of Rs.19,67,443/- but partly succeeded as ld. CIT(A) sustained disallowance @ 15% as against 25% made by the Assessing Officer. Now the assessee is in appeal against the order of ld. CIT(A) before the Tribunal for the alleged sustaining of disallowance @ 15% of vehicle repairing expenses.

Ld. Counsel for the assessee submitted that the books of accounts are audited u/s.44AB of the Act, percentage of vehicle repairing expenses in terms of total sales has declined to 4.25% as against 6.78% in the immediately proceeding financial year. He further contended that ld. AO

We have heard the rival contentions and perused the records placed before us. Sole issue involved in this appeal relates to sustaining of disallowance @15% of vehicle repairing expenses by ld. CIT(A). We observe that the total vehicle expenses incurred at 78.69 lacs is 4.25% of the total turnover of Rs.1853 lacs. In the preceding two years the percentage of vehicle repairing expenses was 7.91% and 6.78% of the total sales for financial year 2008-09 and financial year 2009-10 respectively. It is true that total percentage of the expenditure has reduced. It is also not disputed that books of accounts are regularly audited and they are not being rejected by the assessing officer for computing income of the assessee.

However, from perusal of the assessment order we find that when the information was culled for the justification of vehicle repairing expenses, assessee merely submitted self made voucher and thereafter, even been after providing sufficient opportunity, assessee was unable to furnish the remaining details as regards the supporting bills and location at which expenses were made. It is also accepted by the assessee that the impugned expenditure were not well supported by proper bills and most of the payments were made in cash.

In the result, appeal filed by the assessee is partly allowed. This Order pronounced in Open Court on 26/12/2017