Business expenditure Expenses of toll plaza business Assessee filed return of income During assessment proceeding, AO noted that assessee had shown income from Automobile and toll collection Further, assessee had shown net profit from motor trade and toll plaza 1.28% and 4.25% respectively and overall 1.58% While in AY 2014-15, assessee had shown net loss 5.02% from toll collection and filed return of income at 0.50% N.P. rate AO observed that assessee was not a new one in business of toll collection Policies of National Highway Authorities remained same in all over state in India however, toll collection was made more than AY 2013-14 but due to expenses debited it resulted to loss During relevant year operating expenses increased 6.56% in proportion to toll collection without any reasons thus, operating expenses should be allowed on basis of AY 2013-14 percentage i.e., 5.47% and remaining amount was added back to assessee’s income CIT(A) granted relief to assessee—Held, findings of AO clearly demonstrate that AO had made addition based on directions of Addl. CIT and had not examined anything at his own AO had not brought out anything on record to demonstrate that expenses were not incurred for purpose of business neither he had brought on record anything for proposition that expenses claimed were not supported with bills and vouchers CIT(A) had allowed relief to assessee by recording that if AO was not convinced of a particular expenses he could have made necessary verification before making disallowance Onus was on AO to establish that expenses incurred by assessee were excessive or unreasonable As regards arguments of DR regarding fresh evidence accepted in violation of Rule 46A, CIT(A) had noted that on perusal of toll collection statement submitted by assessee, in last week in month of March, 2014, there were total amount of toll plaza fee payable and he also noted that total amount payable as toll plaza fee comes out to be Rs.1,27,07,644.56 Those findings were based upon a letter dated 06/12/2016 which was addressed to AO during assessment proceedings Therefore, CIT(A) had not relied upon any additional evidence while giving relief to assessee Revenue’s appeal dismissed.

ASSISTANT COMMISSIONER OF INCOME TAX & ANR. vs. PREMIER CAR SALES LTD. & ANR.

(2019) 57 CCH 0026 LucknowTrib