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| The Tax Publishers2020 TaxPub(DT) 3611 (Karn-HC) INCOME TAX ACT, 1961
Section 37(1) Section 40A(3)
Where Tribunal neither assigned any reasons nor disclosed any basis for directing deletion of additions made by AO as well as CIT(A), in relation to transportation expenses, except confirming part addition made by AO, order of Tribunal was remanded back for adjudication afresh.
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Business expenditure - Allowability - Tribunal deleted addition without giving any reasons for same -
Assessee was a partnership firm carrying on business of export of silk waste and sale of iron-ore fines. AO made disallowance of transportation expenses holding the same as non-genuine. CIT(A) enhanced disallowance holding expenditure were made in cash above prescribed limit in violation of section 40A(3). Tribunal gave part relief to assessee, against which revenue filed appeal. Held: Tribunal neither assigned any reasons nor disclosed any basis for directing deletion of additions made by AO as well as CIT(A), except confirming the part addition made by AO. It was also pertinent that Tribunal did not assign any reasons on issues raised before it and did not give any reasons in support of its conclusion. Order passed by Tribunal was cryptic and suffered from the vice of non application of mind. Factual adjudication was required so far as disallowance pertained to disallowance made under section 40A(3) and for allegedly non-genuine expenditure. Thus, matter was remanded back to Tribunal for adjudication afresh on said two grounds.
REFERRED : Ganapathy & Co., Bangalore v. The CIT (2016) 381 ITR 363 (SC) : 2016 TaxPub(DT) 561 (SC), Patnaik and Co. Limited v. CIT(1986) 161 ITR 365 (SC) : 1986 TaxPub(DT) 1663 (SC), Parashuram Pottery Works Co. Limited v. ITO (1977) 106 ITR 1 (SC) : 1977 TaxPub(DT) 725 (SC) and CIT, Bangalore v. K.Y. Pilliah and Sons (1967) 63 ITR 411 (SC) : 1967 TaxPub(DT) 232 (SC).
FAVOUR : Matter remanded.
A.Y. : 2005-06
INCOME TAX ACT, 1961
Section 40(a)(ia)
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