Case Law Details
Capital Tours (India) Pvt. Ltd. Vs ITO (ITAT Kolkata)
The issue under consideration is whether the expense incurred for puja for Smooth functioning of Business of Transport will be allowable as business expense?
In the present case, the assessee claimed puja expenses of Rs.1,65,308/- which has been disallowed by both the authorities below on the ground that there was no voucher to substantiate the claim and since the expenses were in cash they disallowed it.
ITAT states that, puja expenses are inextricably connected with the business of the assessee. According to him, the drivers and cleaners performed puja every day before they start the journey to the destination and this is on the belief that if puja is performed to God, the vehicle will not meet with any accident and they would be able to safely ply to the destination without any hindrance. So for performing daily puja the expenses are incurred for buying small garlands, lighting lamps/candles etc. Puja expenses are required for smooth running of the business. However, both the authorities below disallowed the same for the absence of vouchers and since it was cash payment. It is noted that the assessee is into the business of truck plying in North-East States and it is common knowledge that the drivers and cleaners before they start their journey on their trucks conduct puja of the God they believe and they incur expenses for buying garlands, bhog etc. for safe and smooth running of the vehicle while they go to the pre-destined location which are located in the remote areas of Assam, Meghalaya and Mizoram to deliver/collect goods. The expenses thus it is noted are incurred by the assessee for puja is for the smooth functioning of the business of transport as discussed cannot be disallowed. Since it has been found that the expenses incurred are for the smooth functioning of the business of plying trucks, the expenses need to be allowed. However, taking into consideration the peculiar facts and circumstances of the case, 10% of the expenses may be disallowed for plugging the revenue loss if any and the balance amount added is directed to be deleted.
FULL TEXT OF THE ITAT JUDGEMENT
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