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| The Tax Publishers2020 TaxPub(DT) 2765 (Kol-Trib) INCOME TAX ACT, 1961
Section 37(1)
Expenses claimed by assessee as miscellaneous expenses while plying trucks in remote areas of Assam, Meghalaya and Mizoram could not be said to be an unreasonable expense when assessee had a substantial turnover and it returned gross profit more than 25%.
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Business expenditure - Allowability - Miscellaneous expenses claimed while plying trucks in remote areas -
AO disallowed expenses incurred in cash, which were put cumulatively under head 'Miscellaneous Expenses' for which only self made vouchers could be produced. Held: Due to bad conditions of road and since it was hilly terrain due to incessant rain and bad weather conditions of road were bad and, therefore, truck drivers incurred expenses for repairs of trucks, (frequent tyre burst etc.) for which local repair shops insisted payment on cash and were reluctant to give any bills/vouchers. Assessee's accounts were audited and auditor did not find any mistakes or short-comings. Revenue made disallowance without rejecting books of accounts. Expenses claimed by assessee as miscellaneous expenses while plying trucks in remote areas of Assam, Meghalaya and Mizoram could not be said to be an unreasonable expense when assessee had a turnover of Rs. 10.63 cr. and it returned gross profit of Rs. 2.75 cr. which came to G.P of 25.80%.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2014-15
INCOME TAX ACT, 1961
Section 37(1)
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