2016 (12) TMI 1138

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....ent, the Assessing Officer disallowed Rs. 1,41,49,023/- under section 40(a)(ia) of the Act on the ground that the assessee has not deducted TDS on such amount. This amount represents transportation charges paid by the assessee to M/s.SSTA Logistics (I) Pvt. Ltd. for transportation of 1000 MTS of iron ore fines from M/s. Nadeem Mines to Karwar plot. 4. On appeal, ld. CIT(A) confirmed the disallowance made by the Assessing Officer. However, he directed the Assessing Officer to verify the alternative plea of the assessee that TDS on the said amount has been deducted and paid in the subsequent year and therefore, the entire expenditure needs to be allowed in subsequent year. 5. The Authorized Representative of the assessee submitted that these expenses are all reimbursable. There is no income element as it is only a reimbursement and therefore, no TDS is required to be deducted. The Authorized Representative of the assessee further submitted that in any case, the payments were already made by the end of the accounting year and there is no outstanding due payable and therefore, since the entire amount was paid during the year, the provisions of section 40(a)(ia) are not applicable. Fo....

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....assessee by considering the earlier decisions. Judicial Member is one of the party to the said decision The relevant observations of the Tribunal are as under: "5. We have heard both the parties and their contentions have carefully been considered. After careful consideration, respectfully following the decision of Co-ordinate Bench in the case of M/s. Vivil Exports P. Ltd. vs. ITO (supra), we delete the disallowance. For the sake of completeness relevant observation of the Tribunal from the said decision are reproduced below: 4. Though number of grounds were urged before us in the grounds of appeal annexed to Form No. 36, at the time of hearing the learned counsel for the assessee submitted that the assessee having made the payment, section 40(a)(ia) cannot be attracted because it speaks of the amount "payable" and it does not cover the amount already paid. In this regard he relied upon the following decisions of the ITAT Chennai Benches wherein the Bench had taken into consideration the decision of the ITAT Special Bench in the case of Merilyn Shipping & Transport, the order of which was suspended by the High Court but at the same time there was a subsequent judgment of the H....

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....h Court was made subject to Special Leave Petition filed before Hon'ble Supreme Court and their Lordships vide their order 6 ITA NO.2293/MUM/2013(A.Y. 2005-06) ITA NO.2294/MUM/2013(A.Y. 2006-07) dated 02/07/2014 in CC No.8068/2014 have dismissed the SLP and copy of this order is filed by the assessee at page 31 of the paper book and the said order read as under: "SUPREME COURT OF INDIA RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C)..... CC No.(s) 8068/2014 (Arising out of impugned final judgment and order dated 09/07/2013 in ITA 122/2013 passed by the High Court of Judicature at Allahabad) COMMISSIONER OF INCOME TAX-MUZAFFAR NGR. Petitioner(s) VERSUS M/S. VECTOR SHIPPING SERVICES (P) LTD. Respondents(s) With appln.(s) for c/delay in filing slp and office report) Date:02/07/2014 This petition was called on for hearing today. CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MADAN B LOKUR HON'BLE MR.KURIAN JOSEPH For Petitioner(s) Mr. Mukul Rohatgi, Attorney General Mr. Rupesh Kumar, Adv. Mr. Sahil Tagotra, Adv. Mrs. Anil Katiya, Adv. For Respondent(s) UPON hearing the counsel the Court made the following ORDER Heard Mr.Mu....

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....ities below and further submitted that handling loss claimed by the assessee is very much reasonable being first year and last year of trading of iron-ore. 13. Departmental Representative supported the orders of the authorities below. 14. We have considered the rival submissions, perused the orders of the authorities below. This aspect of the matter is considered by the ld. CIT(A) with reference to the submissions made by the assessee, the additional evidences filed, remand report of the Assessing Officer and finally restricted the handling loss to 0.90% by observing as under:- "7.10 As far as the handling loss is concerned, the submission of the appellant clearly shows that when the ;iron ore is loaded from the mines, transported and unloaded at the plots in the ports, there is definitely some loss in each stage. The ore loaded from the mines are stored in the plot to accumulate the desired quantify for export which ranges from 20000 MT to 50000 MT and it needs to be stored for 30 to 45 days. Once the desired quantity is accumulated then the iron ore is loaded into the vessel, at this stage certain quantity is lost. Hence, it is inevitable that some amount of loss of Iron Ore a....