The Tax Publishers2021 TaxPub(DT) 0811 (Mad-HC)

INCOME TAX ACT, 1961

Section 37(1)

Ad hoc disallowance made by AO of the weighing and unloading charges without specifically assigning any reason to a voucher or bunch of vouchers produced by assessee was not legally tenable.

Business expenditure - Allowability - Weighing and unloading charges - Bunch of vouchers produced

AO held that in respect of expenditure claimed on account of the weighing and unloading charges, some of the vouchers were handmade and some vouchers were not available so 20% of the expenses would be disallowed and added back the same to the returned income of assessee. Held: Observation of AO that the vouchers were self-made/hand written and some vouchers were not produced appears to be a vague statement. As given the nature of the industry, judicial notice of the fact is that always computer generated vouchers may not be issued by the transporters, unless they are an organization owning a large fleet. If AO had any doubt with regard to the genuinity of any one of the vouchers produced he could have drawn sample vouchers and called upon the assessee to establish its genuineness. Thus, without doing so, making an ad hoc disallowance by not specifically assigning any reason to a voucher or bunch of vouchers was not legally tenable.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2014-15



IN THE MADRAS HIGH COURT

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