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2011 (11) TMI 703

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....assessee are against the order of CIT(A) confirming disallowance of freight charges and clearing charges by invoking provisions of section 40(a)(ia) of the Act on account of non-deduction of TDS. For this, assessee has raised following ground nos. 1 and 2: "2. For that the Ld. C.I.T(A) was not justified in not deleting the disallowance of freight charges of Rs. 62,285/- u/s. 40(a)(ia) on account of non-deduction of TDS where the freight charges includes Octroi tax paid to Maharastra Government by the transporters and reimbursed by the assessee and the balance amount paid to M/s. Inland Road Transport (P) Ltd. as freight charges on which TDS was not deductible. 2. For that the Ld. C.I.T(A) was not justified in not deleting the disallowan....

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....5.00 3,300.00 165 5 30 - 4,785.00 01-10-2004 812 2,640.00 133 5 2,823.00 - 6,413.00 10-11-2004 523 1,518.00 74 5 30 - 2,150.00 02-12-2004 1,078.00 2,200.00 112 5 30 - 3,425.00 25-12-2004 1,111.00 2,846.00 143 5 3,030.00 - 7,135.00 02-02-2005 843 2,200.00 112 5 30 25 3,215.00 15-02-2005 599 1,595.00 83 5 30 18 2,330.00 24-02-2005 1,111.00 2,035.00 102 5 30 31.8 3,314.80 31-03-2005 - - 1,254.00 60 2,315.00 123 3,752.00 31-03-2005 - - 641 29 2,168.00 62.5 2,900.50 28-03-2005 1,361.00 2,640.00 135 5 30 39 4,210.00 11-01-2005 1,437.00 3,685.00 191 5 30 42.4 5,390.40   12,622.00 30,032.00 3,420.00 159 15,711.00 341.7 62,285.70 Similarly, Ld....

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....incurred by agency for/on behalf of the assessee, the assessee was not obliged to deduct tax at source, and, therefore, the CIT(A) has rightly deleted the addition." He also relied on in the case of ITAT, Kolkata "B" Bench in ITA No.1580/K/2008, DCIT Vs. M/s. M. B. Ispat Corporation Ltd. Assessment Year 2005-06 dated 03.04.2009, wherein it has been held as under: "We have carefully considered the submissions of the Ld. Representatives of both the parties and the orders of the authorities below. We have also perused the copy of consignment of sale agreement entered into by the assessee and M/s. Beharilal & Co. It is a fact that if the assessee reimbursed the expenses towards freight incurred on its behalf under an agreement for which sepa....

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....i High Court in the case of CIT Vs. Industrial Engg. Projects P. Ltd. (202 ITR 1014). It is a settled proposition of law from the various decisions of High Courts and particularly the decision of Hon'ble jurisdictional High Court (supra) that when there is no element of income and the payment is only as a reimbursement of expenses incurred by the payee, then no disallowance can be made u/s. 40(a)(ia). In the case in hand, the A.O. has not given a finding that the expenses were for office upkeeping as revenue receipt in the hands of Reliance Energy Ltd. and not a pure reimbursement of expenses. Respectfully following the decision of the Hon'ble jurisdictional High Court (supra), we decide this issue in favour of the assessee and against the ....