ITAT Kolkata: In a case relating to assessment of income tax of the assessee running transport business involving plying of trucks in the North East States especially in Assam, Meghalaya, and Mizoram, Judicial Member A. T. Varkey, has held that the expenses incurred by the assessee for puja conducted by drivers before starting their journey every day, is for the smooth functioning of the business of transport and hence, cannot be disallowed.
Through the order dated 30.062020 passed in the Learned Income Tax Appellate Tribunal, Kolkata Bench (hereinafter referred to as to “ITAT”) has allowed the deduction of Puja expenses which is incurred by the M/s. Capital Tours (India) Pvt. Ltd. (hereinafter referred to as to “Assessee”) for the smooth functioning of its business.
Background
The Assessee had filed his income tax return whereby the Assessee declared a total income of Rs. 29,99,270/-. The case was taken up for scrutiny and a statutory Notice under Section 143(2) of the Income Tax Act, 1961 was issued.
After analysing the documents, the Assessment Officer ( AO) disallowed expenses amounting to Rs. 1,65,308/- which was treated as Puja expenses and added it to the total income of the Assessee as the Assessee had failed to present any voucher to substantiate it and all the expenses incurred were in cash.
Aggrieved by the order passed by the AO, the Assessee preferred an Appeal on various grounds before the Ld. CIT(A). Among the various grounds raised by the Assessee, Assessee also sought deduction of Puja expenses. Being Aggrieved by the order passed by the Ld. CIT(A) the Assessee filed an appeal before ITAT.
When the matter was listed before ITAT the Assessee argued that they are in the transport business and are plying trucks in the North East States especially in Assam, Meghalaya, and Mizoram. It was further argued that puja expenses are inextricably connected with the business of the Assessee as the drivers and cleaners perform Puja every day before they start the journey to the destination with a belief that the Puja will protect them from any untoward event. In order to perform daily puja, certain expenses are incurred for buying small garlands, lighting lamps/candles, etc.
Finding
After going through the peculiar facts of the case and by placing its reliance on the Judgment and final order passed by the Hon’ble Calcutta High Court in C.I.T v. Bata India Ltd., 2014 SCC Online Cal 20317, ITAT allowed the deduction of Puja Expenses. He noted,
“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.”
[M/s Capital Tours (India) Pvt. Ltd. v. Income Tax Officer, WD-12(1), Kolkata ITA No. 1671/Kol/2019, decided on 30.06.2020]