Repairs and Maintenance expenses of Transport Segment were incurred by its own vehicles and not on Hired Vehicles: ITAT deletes 20% Ad-hoc Disallowance [Read Order]

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) held that repairs and maintenance expenses of the transport segment was incurred by its own vehicles not on hired vehicles. Hence, the bench deleted the 20% ad hoc disallowance made by the assessing officer.

The assessee City Lifeline Travels Pvt Ltd filed the appeal against the order of Commissioner of Income Tax (Appeal) by challenging the 20% ad-hoc disallowance made on expenses incurred for repairs and maintenance under Transport segment using owned vehicles.

During the scrutinizing the return of income of assessee, the Assessing Officer (AO) noticed that the assessee has incurred repair and maintenance expenses at Rs. 1,89,04,401.00. After examining the details from the assesse, the AO further noticed that the assessee has deducted tax at source on expenses of Rs. 20,22,126/- and no TDS has been deducted on balance expenses of Rs. 1,68,82,275/.

Before the tribunal, the counsel for assessee contended that expenses incurred for repair and maintenance of the transportation segment was carried out using own vehicle.

Thus, assessee has specifically explained that no expenses were incurred on hired vehicles and all the expenses have been incurred on owned vehicles.

Further, the assessee produced documents relating to the vouchers before the assessing officer even though the Assessing Officer neither expressed her appreciation nor dissatisfaction.

Counsel for Revenue supported the order of Assessing Officers.

It was observed by the tribunal that during the course of assessment proceedings itself the assessee has explained that repairs and maintenance expenses were incurred by it on its own vehicles and not on hired vehicles.  Further, the explanation of the assessee was supported by bills/vouchers.

The tribunal after reviewing the facts and submissions of the both parties, the two member bench of  N.K. Billaiya, (Accountant Member)  and Anubhav Sharma,  (Judicial Member) deleted 20% adhoc disallowance made on expenses incurred for repairs and maintenance under Transport segment using owned vehicles.

Advocate Satyen Sethi appeared for assessee and  Advocate A.T. Panda appeared for revenue.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates