2018 (1) TMI 798

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....nds of appeal has taken by the assessee: 1. The order passed by the learned CIT(A) is perverse since it is contrary to the facts, provisions of the Act and evidences on record. 2. The learned C1T(A) has erred in law and on facts in confirming the disallowance of foreign exchange fluctuation loss of Rs. 50,24,452/-. 3. The learned CIT(A) has erred in law and on facts in confirming the disallowance of freight charges/transport charges of Rs. 1,99,395/ u/s.40(a)(ia)of the Act. 4. Both the lower authorities have passed the orders without properly appreciating the fact and that they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time ....

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.... prove that it has complied the provisions of sub-section (7) of section 194C of the Act. As the assessee made payment of Rs. 1,99,395/- without deducting the tax is disallowed u/s.40(a)(ia) of the Act as the assessee failed to comply the provisions of sub-section (7) of Section 194C of the Income Tax Act. 3.2 Assessee's contention with regard to the ground in question is reproduced here under: "During the year under appeal, the appellant had incurred expenditure on payment of freight/transport charges amounting to Rs. 1,99,395/-, which was paid to Ragavendra Transport. No tax was deducted at source from the said payment of freight/transport charges as the assessee had furnished his PAN (ABOPN0110H) and accordingly no tax is req....

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....ncome-tax." The appellant submits that the action of the AO in making the impugned disallowance is misconceived, misdirected and contrary to the facts and evidence on record and also the previsions of the Income Tax Act particularly Section 194(6) and Section 40(a)(ia) of the I.T. Act. There is no dispute over the fact that the expenditure in question is genuinely incurred by the appellant company in the course of its normal business and for the purpose of the business. The payment in question has been made to Shri Ragavendra Transport. No TDS was made from such payments for the obvious reason that there was no legal obligation to deduct tax at source from such payments in view of the express prevision contained in sub-Section (6) ....