2013 (8) TMI 380

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.... applying the provision of section 40(a)(ia) of the Act. The Ld. CIT(A) has erred in rejecting the appellant's submission and in ignoring the facts of the case. 2. Because the Ld. CIT(A) while confirming the addition of Rs. 14,93,965/- has erred in ignoring the legal position that section 40(a)(ia) is applicable only in the case where the amount is payable on the last day of previous year. All the payments as reimbursement of expenses has been made time to time during the year and n amount is payable on the last day of previous year. The addition on this ground is totally unwarranted and deserves to be deleted. 3. Because the Ld. CIT(A) has erred in not adjudicating ground no.5 taken before him." 2. The brief facts of the case are ....

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....by them on sales made on behalf of the assessee company it will be seen that the expenses incurred by them are much more than the expenses reimbursed to them at fixed cost rate structure. Expenses at the cost rate are reimbursed to the consignee agent only to have control over the expenses.' Therefore, I hold that the claim of the appellant of reimbursement of expenses as it is not linked to the actual expenses is nothing but commissions as it is linked to sales made by the consignee agents. Therefore, the appellant was liable to deduct tax at source on these payment which it failed to do. The Assessing Officer has rightly applied the provisions of sec. 40a(ia) while making the disallowance. The grounds are dismissed." 3. At the outset, ....

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....rused. The effective ground raised in the appeal relate to disallowance under section 40(a)(ia) of the Act, therefore, all supporting grounds of appeal are decided together. The Ld. Authorised Representative submitted that the issue is covered by the decision of I.T.A.T., Special Bench Visakhapatnam wherein it has been held that section 40a(ia) of the Act is applicable in respect of amount remained payable. There is no disallowance under section 40a(ia) of the Act with respect to payment which were actually paid during the Financial Year. In respect of ground no.2, the Ld. Authorised Representative has emphasized that there was no amount payable at the end of previous year. In ground no.3, the Ld. Authorised Representative submitted that th....