Case Law Details
City Lifeline Travels Pvt. Ltd. Vs ACIT (ITAT Delhi)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) Delhi has deleted an ad-hoc disallowance under the transport and sanitization segment incurred by City Lifeline Travels Pvt. Ltd. during the Assessment Year 2014-15. The case revolved around expenses on repair and maintenance, which were classified as ad-hoc disallowances by the Assessing Officer.
The case focused on the ad-hoc disallowance related to the transport and sanitization segment. The Assessing Officer had made a 20% disallowance for the repair and maintenance expenses, asserting that the company had not deducted TDS on the balance expenses. However, the company countered this, explaining that the expenses were linked to owned vehicles, not hired ones. The company’s appeal before the ld. CIT(A) was initially unsuccessful. However, the ITAT took into consideration that the repairs and maintenance expenses were incurred on its owned vehicles and that the Assessing Officer did not point out any defects or infirmities in the explanation, leading to the deletion of the ad-hoc disallowance.
The decision by ITAT demonstrates the need for assessing authorities to validate claims thoroughly before making ad-hoc disallowances. This ruling also underlines the importance of providing a clear explanation supported by proper documentation.
FULL TEXT OF THE ORDER OF ITAT DELHI
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