Expenditure related to goods carriage taken on hire is allowed even if receipts taxed u/s 44AE

Shakir Ahmad Vs ITO (ITAT Delhi)

ITAT Delhi held that expenditure related to the goods carriages taken on hire from the open market for carrying out the transportation activities is available to the assessee even if the receipts are subjected to taxation under provisions of section 44AE of the Income Tax Act.

Facts- After considering the submissions, CIT(A) sustained the additions in respect of disallowance of expenses on account of truck maintenance charges of Rs. 1,59,580/-, driver and conductors salary of Rs. 18,750/-, labour charges of Rs.30,650/-, truck hire charges of Rs.73,410/-, labour charges of Rs.2,41,570/- in respect of loading and unloading of goods. Aggrieved against the order of Ld. CIT(A), the assessee is in appeal before this Tribunal.

Conclusion- However, in the present case, the assessee has taken certain goods carriages on hire which is not owned by the assessee and the assessee claimed certain expenses related to such carriages which is disallowed by the lower authorities. Ld. CIT(A) has not appreciated this aspect. Therefore, the AO is directed to give deduction of expenditure which related to the goods carriages which were not owned by the assessee but taken on hire from the open market for carrying out the transportation activities.

FULL TEXT OF THE ORDER OF ITAT DELHI

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