2012 (10) TMI 1098

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....ax Act, 1961 for the assessment year 2004-05. 2. Ground Nos. 1, 4 & 5 are general in nature and do not require any specific adjudication. Accordingly, these three grounds are dismissed in limine. 3. In Ground Nos. 2 & 3, the assessee has raised the following grievances which are somewhat interconnected and will be taken up together :- "(2) For that the ld. A.O. erred in adding back of Rs. 10,87,802/- on account of difference between amount on which TDS deducted of Rs. 27,52,235/- and the amount which was credited in the profit and loss account, i.e. Rs. 16,64,433/- as service charges. The amount on which TDS has been deducted is the billed amount which includes reimbursement of customs duty, port charges, etc. and other expen....

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....ssessee, as per TDS certificates furnished by the assessee alongwith income tax return, aggregated to Rs. 27,52,235/-. In response to Assessing Officer's requisition to explain this, what he termed as, 'anomaly', a reconciliation statement was submitted by the assessee. It was explained that the amount of difference represented reimbursement of expenditure, and that while reimbursement of expenses is not credited to income under the head 'service charges', in some cases the client has deducted tax at source from reimbursement component as well. The assessee was also called upon to file complete details in respect of reimbursement of expenditure component and expenses incurred in connection with the same. As this requisition was not satisfac....

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....as per TDS certificate did include reimbursement component separately shown so in the bill. In other words, it is for the assessee to prepare detailed reconciliation, duly supported by copies of relevant bills, shown the reimbursement component separately in such bills, and demonstrate that the impugned difference is on account of taxes having been deducted at source in respect of reimbursement component as well. Learned representatives fairly agreed that the matter can be restored to the file of the Assessing Officer for this limited purpose, even as learned Departmental Representative vehemently argued that what is termed as reimbursement of expenses is not a reimbursement simplicitor and a significant part of this billing is actually inc....