TRANSMODAL SERVICES P. LTD,MUMBAI vs. DCIT RG 2(3), MUMBAI

This appeal by the assessee is preferred against the order of the Ld. CIT(A)-6, Mumbai dated 7.10.2011 pertaining to Assessment year 2007-08.

The sole grievance of the assessee is that the Ld. CIT(A) erred in confirming the disallowance made by the AO amounting to Rs. 2,86,675/- being 20% of total travelling and conveyance expenses on ad-hoc basis.

The assessee is in the business of transportation, distribution management and man power supply services. Return for the year was electronically filed on 31.10.2007 declaring Nil income. The return was selected for scrutiny under CASS and accordingly statutory notices were issued and served upon the assessee. While scrutinizing the return of income and going through the Schedule-15 forming part of the Accounts, the AO found that the assessee has debited expenses of Rs. 14,33,381/- under the sub-head travelling and conveyance. According to the AO, most of the expenses are supported by self made vouchers making the verification difficult. The AO accordingly disallowed 20% of the same and made the addition of Rs. 2,86,676/-.

The assessee carried the matter before the Ld. CIT(A) but without any success. 5. Before us, the Ld. Counsel for the assessee vehemently submitted that without going into the merits of the case and without understanding the factual matrix, the AO has made an adhoc disallowance of 20% without pointing out any specific entry/figure which according to him was not found supported by any documentary evidence. Referring to various documentary evidences in support of its contention, it is the say of the Ld. Counsel that every payment is supported by relevant documentary evidence which has been completely ignored by the AO. The Ld. Counsel also furnished a chart showing claim of expenses in A.Y. 2006-07, 2007-08 & 2008- 09. The Ld. Counsel pointed out that in A.Y. 2006-07, disallowance made by the AO was deleted by the Ld. CIT(A) and the Revenue has accepted the order of the Ld. CIT(A) in A.Y. 2008-09. The AO has made no addition while making the order u/s. 143(3) of the Act. It is the say of the Ld. Counsel that the impugned disallowances deserves to be deleted on the facts of the case.

The Ld. Departmental Representative strongly supported the findings of the Revenue authorities.

We have given a thoughtful consideration to the orders of the authorities below. It is an undisputed fact that the AO has simply disallowed 20% without bringing on specific defects in the documentary evidences relating to the impugned claim of expenses. The AO has made a very general remark that the expenses are supported by self made vouchers. The factual matrix as discussed hereinabove clearly show that the disallowance made in the immediately preceding assessment year is deleted by the Ld. CIT(A) and no addition has been made in the subsequent assessment year. No doubt each assessment year is to be treated as a separate unit and res-judicata does not apply to tax proceedings. However, at the same time, the least that is accepted from the AO is to be consistent in his approach. When the facts are identical and the law has not changed, a different view is not permissible.

Considering the facts in totality, we do not find any merit in the disallowance made by the AO. We, therefore set aside the order of the Ld. CIT(A) and direct the AO to delete the addition.

In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 7th October, 2015. Sd/- Sd/- (SANJAY GARG ) (N.K. BILLAIYA) �या�यक सद�य/JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER मुंबई Mumbai; �दनांक Dated : 7th October, 2015 व.�न.स./ Rj , Sr. PS