TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 1547
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....ake of convenience; they are clubbed together, heard together and disposed of in this consolidated order. We will first take up ITA No.2080/Mum/2011:- 2. The common issue raised in all the grounds is against the confirmation of disallowance made by the AO under section 40(a)(ia) of the Income Tax Act, 1961. (hereinafter called the Act). The AO made the addition of Rs. 1,72,14,875/- to the total income of the assessee on account of non deduction of tax at source from reimbursement of expenses. 3. Facts of the case are that the assessee filed return of income on 31.10.2007 declaring a total income at Rs. 7,62,190/- which was processed under section 143(1) of the Act on 31.3.2009. The case of the assessee was selected for scrutiny and statut....
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.... to the total income of the assessee in terms of section 40(a)(ia) of the Act. The AO also observed and noted that the return of the assessee was exceeding Rs. 40 lakhs and therefore the assessee was liable to deduct tax at source from the various payment towards Freight charges as per the provisions of section 194C of the Act as the assessee was working as a sub-contractor and accordingly disallowed and added the amount of Rs. 1,72,14,875/- to the total income of the assessee by assessing the income of assessee at Rs. 1,79,77,065/- vide order dated 29.12.2009 passed under section 143(3) of the Act. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A). 4. During the course of appellate proceedings, the as....
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.... to them fall within the purview of section 194C(2) are disallowable u/s. 40(a)(ia). The case law of M/s.Teja Constructions - Hyderabad would have been applicable had the appellant been able to support his plea that he is paying his parties to do his job and GP is worked out before taking into consideration administrative and other indirect expenses. Having failed to do that, I hold that case law of M/s. Teja Constructions is distinguishable on facts in the case of appellant, this plea of appellant is rejected . As regards, Hon'ble Supreme Court's decision in the case of M/s. Hindustan Coca Cola Beverage (P) Ltd., in my humble opinion it is on the issue of levying the penalty u/s 201(1) and 201(1A) of the I.T.Act and not on section 40....
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.... entities to whom transport facilities were provided by arranging the transport from third parties to whom the payments were passed on by the assessee and thus the assessee was only a facilitator of providing services. Therefore the provisions of TDS were not applicable as it is a trite law that no TDS was liable to be deducted from the reimbursements of expenses . Alternatively, the ld.AR argued that the provisions of section 40(a)(ia) of the Act were not to be invoked where payees of the receipt have filed their return and paid dues taxes as provided in Provision-2 to section 40(a)(ia) of the Act. Finally, the ld. AR submitted that in view of these facts and legal position, the order of ld. CIT(A) be set aside and the AO be directed to de....
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....port etc and therefore the provisions of section 194C were attracted and accordingly added a sum of Rs. 1,72,14,875/- to the total income of the assessee by invoking the provisions of section 40(a)(ia) of the Act. It is sufficiently clear from the facts discussed hereinabove that the assessee was simply providing services of facilitators by arranging the transport vehicles from the other transporters for which he used to get the reimbursement from those parties for whom he arranged these services and used to charge his commission only which was duly shown as income. We therefore, find merit in the contentions of the ld. AR that the assessee was not supposed to deduct TDS on the reimbursement made. We therefore inclined to restore the matter....