TaxTMI 
TaxTMI 
2015 (12) TMI 506
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....ir freight charges which he was required to deduct as per provisions of section 194C of the IT Act, 1961. Reliance is placed on the following judicial pronouncement and circulars:- (i) Associated Cement Co. Ltd. Vs Cit (1993) 201 ITR 435 (SC) (ii) CBDT circular no. 681 dt. 08.03.1994 (iii) CBDT circular no. 715 dt. 08.0.1995 (Question no. 30) 2. Whether in the facts and circumstances of the case, the Ld. Commissioner of Income Tax (Appeals) has erred in facts and law in deleting the addition of Rs. 1,87,912/- made by the AO u/s 40(a)(ia) of the IT Act, 1961 for non making of TDS on sea freight which he was required to deduct as per provisions of section 194C of the IT Act, 1961 and payment made by the assessee squarely fell u....
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....Taxmann.com 229-provision of sec 194C do not apply to shipping freight charges paid by an exporter to shipping agents of non-resident shipping companies. And for air freight is paid as reimbursement of expenses to the cargo and TDS is not to be deducted on reimbursement of expenses as per Circular No. 715 dated 08.08.1995. Regarding this I am enclosing herewith a copy of bill of the party and cargo bill. In this bill cargo agent also charged service tax on the amount of their service charges and not on the whole bill amount i.e. Air freight plus service charges because it is reimbursement of expenses. So the TDS provision is applicable only the amount of their service charges and this amount is less than the prescribed limit for deductio....
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....lant are as under:- "1. Provisions of section 194C were not applicable to air freight of R. 12,44,115/- and shipping charges (Sea Freight) of Rs. 1,87,912/-. This issue is covered by the order dated 10.03.2011 of ITAT Ahmadabad C Bench in the case of DCIT Vs Shri Hasmukh J. Patel, Prop. Jayshree Industries, Ankleshwar reported in 10 Taxman.com 229. Copy of this judgment is placed on record & relevant portion of is reproduced below:- "The AO invoked the provisions of section 40(a)(ia) of the IT Act for non-deduction of TDS as required u/s 194C of the IT Act. However, the above provision is applicable for the amount payable to the resident or the amounts payable to contractors or sub-contractors being resident. Similarly, the provisions....
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....d as also considered by him in para 1 at page 2 of assessment order. The learned AO is factually incorrect in making the following observation at page 5 para 1:- "Thus, it is clear that where consolidated bills have been raised, TDS was to be deducted. In the case of assessee, cargo agent has nowhere mentioned that bills issued by it include payment in the nature of reimbursement. Assessee has argued that M/s Movers International Pvt. Ltd. has not paid Service Tax on freight amount and charges service Tax only on their service charges which shows that Air freight charged by the agent was in the nature of reimbursement. This plea is not acceptable because charging of Service Tax is entirely a different issue. Merely not charging of Servic....
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....f the learned AO in last para at page 5 are also not fully correct because in the following cases amount of Service charges are less than 50,000/-. a) Canin Express Logistics (P) Ltd. b) Nex Logistics India, Meerut c) Online Courier Services, New Delhi 7. The reliance was placed on the following case laws: ACIT Vs Grandprix Fab. (P) Ltd. (2010) 128 TTJ(Delhi 'D'- Trib) CIT(TDS) Vs Asstt. Manager (Accounts) Food Corporation of India 326 ITR 106 (P&H) CIT Vs Bhagwati Steels 326 ITR 108 (P&H) Merilyn Shipping & Transports Vs ACIT, Range Visakhapatnam (2012) 136 ITD 23 (SB) 8. The ld. CIT(A) after considering the submissions of the assessee deleted the addition by observing that the payments made on account of air freight were actua....
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....ITR 642. It was also pointed out that the SLP filed by the department against the said order was dismissed by the Hon'ble Supreme Court. It was contended that the Circular No. 10/DV of 2013 dated 16.12.2013 issued by the CBDT and reported in 360 ITR 36 (St) explained that the provisions of Section 40(a)(ia) of the Act would not be applicable to the amount payable in State of Uttar Pradesh due to the judgment of the Hon'ble Allahabad High Court. It was also contended that the issue is squarely covered by the decision of this Bench of the Tribunal in ITA No. 18/Del/2013 for the assessment year 2008-09 in the case of ITO, Ward- 27(1), New Delhi Vs Sh. Anoop Khandelwal, New Delhi (copy of the said order was furnished). 11. We have considered t....