TaxTMI 
TaxTMI 
2015 (11) TMI 298
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....31/3/2010 & 40(a)(ia) is not applicable to amounts paid during the year." 2. Facts of the case, in brief, are that assessee was engaged in the manufacturing of rice and its bye-products and filed the return of income on 23-9-2010, declaring an income of Rs. 1,04,790/-, which was processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the "Act" in short), on 22-4-2011. Later on, the case was selected for scrutiny. During the course of assessment proceedings the AO noticed that the assessee had debited warehouse paddy rent to the tune of Rs. 5,76,808/-, which comprised of Rs. 60,000/- paid to M/s Hanuman Rice Mills on 28-11-2009 and Rs. 5,16,808/- paid to Haryana Warehousing Corporation and Central Warehousing Corporat....
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....ovt. corporations." 4. The assessee also furnished the copy of the Circular no. 699 dated 30- 1-1995 issued by the CBDT. 5. The ld. CIT(A) asked the assessee to produce evidence that the Haryana Warehousing Corporation and Central Warehousing Corporation were entities, which were government and statutory authorities or local authorities covered u/s 10(20) or 10(20A) of the Act. 6. In response, the assessee furnished the written submissions, which read as under: "That for non deduction of TDS from rent paid to Central Warehousing Corporation of Rs. 206452/- and Rs. 310356/- to State Warehousing Corporation the expenses have been disallowed and added as Income. The bare reading of Section 194-I is clear- The payee is the Govern....
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.... made u/s 194-C of the Act by disallowing u/ s 40 a(ia) of the Act, paid to NBHC for guarding and supervisory work. The contract is effected between the bank and NBHC. The bank also makes certain payments out of the interest earned to the NBHC(National Bulk Handling Corporation)The assessee has to pay as per bank directions. As there no contract between the appellant and NBHC no TDS was made. Further payment of salary to two guards and supervisor are finalized by the bank and guards are also changed from time to time thus TDS was not required." 10. The ld. CIT(A), after considering the submissions of the assessee, observed that if the contention of the assessee was considered to be true that the contract was between the bank and NBHC and....
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.... was not justified. Reliance was placed on the decision of the ITAT Visakhapatnam, Special Bench in the case of Merilyn Shipping & Transport Vs. JCIT and the judgment of the Hon'ble Allahabad High court in the case of CIT vs. Vector Shipping Services Pvt. Ltd. 357 ITR 642. Reliance was also placed on the following case laws: - Hon'ble Delhi High Court in the case of CIT vs. M/s DLF Commercial Project Corporation (ITA nos. 627/2012 & 507/2013 dated 15-7-2015); - ITAT Mumbai Bench 'J' in the case of Shri Jitendra Mansukhlal Shah Vs. DCIT (ITA nos. 2293 & 2294/Mum/2013 -order dated 4-3-2015). 12. In his rival submissions, ld. Sr. DR reiterated the observations made by the authorities below and further submitted that 'payable' does not....
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....rt in that case specifically held that "reimbursement of expenses can, under no circumstances, be regarded as revenue receipt" and therefore, it is not liable to income tax. The Court relied upon the Supreme Court's decision in CIT v. Tejaji Farasram Kharawalla Ltd., [1968] 67 ITR 95 (SC), where the Court had held that it is only the amount that exceeds the expenditure incurred by the agent that would be liable to tax. More recently, this Court in Fortis Health Care Ltd. (supra) has also held that amount received towards reimbursement of expenses is not taxable under the Act. 19. In the instant case, it is undisputed that M/s DLF Land Ltd. had deducted TDS on the payments made by it under various heads on behalf of the assessee. Furt....
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.... expansively by Section 194J (3) Explanation (a)). Neither provision obliges the person making the payment to deduct anything from contractual payments such as those made for reimbursement of expenses, other than what is defined as "income". The law thus obliges only amounts which fulfill the character of "income" to be subject to TDS in such cases; for other payments towards expenses, the deduction to those entitled (to be made by the payeee) the obligation to carry out TDS is upon the recipient or payee of the amounts. 21. The facts of this case are identical to those in Gujarat Narmada Valley (supra) and for the reasons stated above, this Court does not find any compelling ground to arrive at a different conclusion. Thus, the ITAT'....