puja expenses – business expenses – transport – ITAT – Taxscan (2)The Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has held that the puja expenses incurred by the assessee for the smooth functioning of the business of transport can be treated as ‘business expenses’ for the purpose of allowing income tax deduction.
While filing its income tax return, the assessee claimed puja expenses of Rs.1,65,308/-. The claim has been disallowed by the authorities below on the ground that there was no voucher to substantiate the claim and since the expenses were in cash they disallowed it.
Before the Tribunal, the assessee contended that the puja expenses are inextricably connected with the business of the assessee. According to them, the drivers and cleaners performed puja every day before they start the journey to the destination and this is on the belief that if puja is performed to God, the vehicle will not meet with an accident and they would be able to safely ply to the destination without any hindrance. So for performing daily puja the expenses are incurred for buying small garlands, lighting lamps/candles, etc.
The assessee further relied on the Calcutta High Court decision in the case of Bata India wherein it was held that puja expenses are required for smooth running of the business and, therefore, the Ld. AR wanted me to direct the deletion of the addition. Per contra, the Ld. DR contended that at least 50% of the claim should be disallowed.
Allowing the above contentions, the Tribunal noted that the assessee had claimed puja expenses of Rs.1,65,308/-. However, both the authorities below disallowed the same for the absence of vouchers and since it was cash payment.
“It is noted that the assessee is into the business of truck plying in the North-East States and it is common knowledge that the drivers and cleaners before they start their journey on their trucks conduct puja of the God they believe and they incur expenses for buying garlands, blog, etc. for the safe and smooth running of the vehicle while they go to the pre-destined location which is located in the remote areas of Assam, Meghalaya, and Mizoram to deliver/collect goods. The expenses thus it is noted are incurred by the assessee for puja is for the smooth functioning of the business of transport as discussed cannot be disallowed. Since it has been found that the expenses incurred are for the smooth functioning of the business of plying trucks, the expenses need to be allowed. However, taking into consideration the peculiar facts and circumstances of the case, 10% of the expenses may be disallowed for plugging the revenue loss if any and the balance amount is directed to be deleted,” the Tribunal said.