TaxTMI 
TaxTMI 
TaxTMI 
2015 (1) TMI 56
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....facts of the case are as follows. The assessee an individual is engaged in the business of Import & Trading in Electrical goods for the year in dispute. The return of income was filed on 31.10.2007 declaring income of Rs. 1,99,892/-. The assessment was taken up for scrutiny by issuance of notice u/s 143(2) of the Act. The scrutiny assessment u/s 143(3) of the Act was completed vide order dated 29.12.2009 by making the following two disallowances of expenditure by invoking provision of u/s 40(a)(ia) of the Act. i) Disallowance u/s 40(a)(ia) on account of Rs. 18,16,637/-. non deduction of TDS on clearing and forwarding charges ii) Disallowance on commission payments Rs. 9,00,300/- u/s 40(a)(ia) on account of purported default in timely dedu....
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....amp charges, Bank charges, De-stuffing charges etc. These bills also include part payment of import duty paid by the appellant. Since Import Duty & Port charges are payment to Govt, as per provisions of law T.D.S. is not deductable. Other expenses which were reimbursed are also not subjected to T.D.S. In view of the facts and circumstances of the case the disallowance made by the Assessing Officer of Rs. 18,16,637/- u/s 40a(ia) is uncalled for and is therefore deleted. This ground of appeal is allowed." As regrds disallowance of commission on sales of Rs. 900,300/- made u/s 40(a)(ia). "I have gone through the order of the Assessing Officer and the written submission of the appellant and also perused the case laws relied upon by the appell....
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....sessee. Copies of the few bills raised by the two agencies were placed on record at Pages 40 to 66 of the assessee's paper book. On perusal of the same, it is clearly evident that these are nothing, but reimbursement of expenses incurred by the clearing agencies on behalf of the assessee. Therefore, these amounts did not constitute income of the clearing agent and no TDS was required to made thereon. Therefore, the provision of Section 194C will not be applicable in respect of reimbursement of expenses. 6.2 Circular No.715 dated 08.08.1995 was issued by CBDT on "Clarifications on various provisions relating to tax deduction at source regarding changes introduced through Fiannce Act, 1995". The said circular in reply to question no.30, prov....
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.... assessee. The ld. CIT(A) drawing support from the co-ordinate bench decision in the case of ITO v. Dr. Willmar Schwabe India (P) Ltd. [2005] 95 TTJ (Delhi) 53 wherein it has been held that the circular is applicable only in cases where the bills are raised for the gross amount inclusive of professional fees as well as reimbursement of actual expenses held that the circular was not applicable in the case of the assessee as C&F agent raised two separate bills, one for the commission and the other for the reimbursement of expenditure." 6.6 Similarly the jurisdictional Bench of the Tribunal in the case of ITO Vs. Dr. Willmar Schwabe India (P.) Ltd. (Supra) held as under: "After considering the rival submissions and perusing the relevant mate....
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....isions of section 194J were not applicable to the reimbursement of actual expenses and the assessee company was not liable to deduct tax at source from such reimbursement. In that view of the matter, we uphold the impugned order of learned CIT(A) on this issue and dismiss the relevant grounds of the Revenue's appeal " 6.7. In view of the aforesaid orders of the Tribunal, we hold that CIT(A) is justified in deleting the disallowance of Rs. 18,16,637/- and we dismiss this ground of the Revenue. 7. As regards, the disallowance of Rs. 9,00,300/-. The brief facts are as under:- 7.1 The assessee had entered into an agreement with the firm M/s Sangeeta Traders to provide commission on sales made to them. As per the terms of agreement, commissio....