2016 (2) TMI 1167

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.... flowers and has set up a high-tech green house floriculture project. Assessee electronically filed its return of income for A.Y. 2009-10 on 25.09.2009 declaring total loss of Rs. 1,07,94,346/- and taxable income at Rs. Nil. The case was selected for scrutiny and thereafter assessment was framed u/s.143(3) vide order dated 23.12.2011 and the total taxable income was determined at Rs. 2,68,907/-. Aggrieved by the order of Assessing Officer, Assessee carried the matter before the ld. CIT(A) who vide order dated 30.10.2012 granted substantial relief to the assessee. Aggrieved by the order of ld. CIT(A), Revenue is now in appeal before us and has raised following effective ground: "1. The ld. CIT(A) has erred in law and on facts in deleting d....

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.... not liable to make deduction of tax at source on reimbursement of expenses because if the payments are made on account of reimbursement, then no TDS is liable to be deducted on behalf of the payer i.e. assessee. The fact remains that whatever amount was paid by the agent towards freight was reimbursed by the appellant. Therefore, there was no income component in the hands of agent. The facts of the case are covered by the decision in case of ACIT v/s Minpro Industries 143 TTJ 331 (ITAT Jodhpur) and DCIT v/s Hasmukh J. Patel 49 SOT 197 (ITAT Ahmedabad). What the assessee had paid was nothing but "reimbursement" of freight charges for which necessary memos were issued by the agents. I am therefore, inclined to delete the disallowance of Rs. ....

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....ddition has given a finding that the amount that was paid by the assessee to the agents were towards freight reimbursements and that there was no income component in the hands of agents and the issue was covered by the decisions of Tribunal cited in the order. We further find that Hon'ble Gujarat High Court on identical facts, in case of Commissioner of Income Tax III vs. Gujarat Narmada Valley Fertilizers Co. Ltd. (supra), order dated 25.06.2013 had dismissed the appeal of Revenue by holding as under: "In an appeal by the assessee the Commissioner (Appeals) allowed such deductions observing that so far as the amount of Rs. 6,93,372/- is concerned as such the agent had already deducted the TDS and deposited in the Government and, therefor....