Merely because some vouchers did not bear truck number/driver’s name, expenses can not be said ingenuine – ITAT

Merely because some of vouchers did not bear the truck number or driver’s name the transport expenses was not ingenuine – ITAT 

ABCAUS Case Law Citation:
ABCAUS 2703 (2019) (01) ITAT

The appellant assessee, a Govt. contractor, was aggrieved by the order of the CIT(A) in confirming the lump sum disallowance for transport expenses.

According to the assessee, transportation expenses  were inevitable part of his business. Further he submitted that the sites of construction work located at different places and were far away from the place of the assessee company.

It was submitted that there was considerable movement of employees for management of the works for which expenses was incurred by the assessee. Taking into consideration the welfare to the employees the same was pleaded as an allowable expenditure under the Act.

It was further argued that the AO had disallowed the expenditure only because, some of the bills/vouchers do not bear the truck number, name of the drivers, or goods transported which made vouchers doubtful.

It was contended that only because the bills did not contain truck number or the name of the drivers, the transport expenses cannot be said to be ingenuine and/or not incurred by the assessee.

The Tribunal noted that AO in his order had observed that many of the bills did not bear truck number or name of drivers whereas the First Appellate Authority in the order impugned observed that no proper bills or vouchers were presented by the assessee from which the details of truck number or the driver’s name or goods transported was evident.

The ITAT also noted that the transportations expense for the year under assessment had decreased @ 1.50% in comparison with the preceding assessment year fact of which was also brought to the notice of the First Appellate Authority by the assessee.

The Tribunal opined that merely because some of the vouchers did not bear the truck number or driver’s name the expenses cannot be termed as ingenuine in the present facts and circumstances of the case.

Furthermore, the details given before the CIT(A) or the necessity as explained for such expenses incurred by the assessee totally cannot be brushed aside.

Accordingly, taking into consideration that the expenses were really small amount the Tribunal restricted the disallowance to 40% only.

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