ITAT restricts adhoc addition for freight expenses to 5%

Latish Chandar Samnani Vs ITO (ITAT Pune)

The issue in the present case is with respect to disallowance of freight for expenses. The Assessing Officer had disallowed the expenses at 20% on adhoc basis which was restricted to 10% by CIT(A). Before us, it is assessee’s submissions that if the addition is restricted to 5% freight expenses, it would be acceptable to the assessee. Considering the totality of the facts and in view of the alternate submission of the Ld.AR, we direct that the disallowance be restricted to 5% of freight expenses. We thus, direct accordingly. Thus, ground raised by the assessee is partly allowed.

FULL TEXT OF THE ORDER OF ITAT PUNE

This appeal by the assessee is filed against the order of the Ld. CIT(Appeals)-1, Nashik dated 26.06.2018 for the assessment year 2014­15. The relevant facts as culled out from the material on record are as under:-

2. The assessee is an individual stated to be engaged in the business of wholesale trading in sugar and grains. The assessee filed its return of income for AY 2014-15 on 29.11.2014 declaring a total income of Rs.6,18,270/-. The case was selected for scrutiny and thereafter assessment was framed u/s 143(3) of the Income Tax Act, 1961 (in short “Act”) on 14.12.2016 and the total income was determined at Rs. 10,95,470/-. Aggrieved by the order of Assessing Officer, the assessee carried the matter before the CIT(A) who vide order dated 26.06.2018 granted partial relief to the assessee. Aggrieved by the order of CIT(A), assessee is in appeal before us and has raised following ground:-

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