2018 (5) TMI 1541

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....ircumstances of the case and in law, the learned Commissioner of Income Tax Appeals [hereinafter CIT(A)] erred in upholding the disallowance made by the learned AO of Rs. 5,60,269/- to M/s. Imperial Packers u/s.40(a) of the IT Act. The learned authorities failed to appreciate that this amount merely represented reimbursement of expenses, according to separate memos/bills clearly stated to be for reimbursement of expenses, and was not subject to deduction of tax at source at all. 2. Appellant craves leave to add/ amend/ alter the above grounds." 3. Briefly stated relevant facts includes that the assessee filed return of income declaring total income of Rs. Nil. During assessment proceedings, the Assessing Officer noted that the a....

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....reimbursed to M/s. Imperial Packers. For the purpose of circulation of magazine named Osho Times magazine, the assessee used the services of M/s. Imperial Packers who worked as Courier service provider. The assessee paid Rs. 5,60,269/- to the said organization for the purpose of postal expenses. As in the case of Osho International Foundation, the assessee reimbursed the said amount of Rs. 5,60,269/- to M/s. Imperial Packers towards the cost of postal stamps affixed for mailing of the Osho Times Magazine. The assessee submitted that the same constitutes reimbursement of postal expenses on actual basis and hence, there is no element of income to assessee and relied on the notings on the memos/bills raised by the parties. The assessee made wr....

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.... is not reimbursement. The CIT(A) opined that the payment made to M/s. Imperial Packers falls within the ambit of section 194C of the Act and justified the decision of Assessing Officer invoking provisions of section 40(a) of the Act. The contents of Para 4.2 are relevant in this regard. 6. Before us, the Ld. Counsel for the assessee submitted that payment made to M/s. Imperial Packers is exactly same to the one made by assessee to Osho International Foundation. There is no question of attracting the section 194C of the Act for invoking provision of section 40(a) of the Act. Bringing our attention to page 5 of the paper book, the Ld. Counsel submitted that there is break up of postage expenses of Rs. 5,60,269/- involved in the case of M/....