AI Drafter 
TaxTMI 
TaxTMI 
2018 (6) TMI 507
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.... on facts in deleting entire addition of Rs. 58.03 lacs, without appreciating that as per the assessee's submission during the course of assessment proceedings, (para 04 of assessment order), it had admitted that out of payment of Rs. 86.52 lakhs, payment of Rs. 67.98 lakhs (payment of Rs. 28.49 lacs on which tax was deducted + payment without deduction of tax for a reasonable cause of Rs. 39.49 lacs),was a allowable deduction, meaning thereby that the balance payment of Rs. 18.54 lacs on which no tax was deducted (Rs. 86.52 lacs minus Rs. 67.98 lacs) was not a allowable deduction, and the same was deserved to be upheld by the C.I.T.(A). 2. On the facts and in the circumstances of the case the learned CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 58,03,774/-made by the A.O. u/s 40(a)(ia) of the Act without considering the Board's Circular No. 715 dated 08.08.1995 wherein it had been clarified that clearing and forwarding agents act as independent contractors and any payment made to them would be liable for deduction of tax at source, and without considering the fact that the expression "any payment" used in the Board's Circular No.715....
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....ement of expenses, M/s S.K. Agency was also paid professional charges by the assessee after the deduction of TDS. The assessee also submitted that similar disallowance was deleted by the learned CIT(A) pertaining to the A.Y. 2008-09, 2009-10 and 2010-11. The learned CIT(A) after considering the submission of the assessee deleted the addition made by the AO by observing as under: "3.3 I have considered the submissions of the learned Authorized Representative and the order of the Assessing Officer. I agree with the Authorized Representative that the matter is covered in favour of the appellant by the decision of the jurisdictional High Court of Gujarat in case of CIT Vs Gujarat Narmada Valley Fertilizers Co. Ltd. [2013] 35 taxmann.com 638 (Gujarat) wherein it has been held that no part of amount reimbursed was to be disallowed in respect of expenses which were incurred by agent on behalf of assessee-principal for transportation and other charges, which had been spelt out in bill itself but no tax was deducted from the same. Ld. Authorized Representative has also brought to my notice that the SLP of the department has been dismissed by the Hon'ble Supreme Court on 17.01.2....
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....s. 58.03 Lakhs. D. A= B+C Detailed working in regard to the submission para-2 dated 19/02/2014 is mentioned here under. A. Total C&F Expenditure incurred Rs. 88.11 Lakhs. B. Out of that S.K. Agency has incurred C&F Expenditure of Rs. 48.62 Lakhs. C. Out of that other parties have incurred C&F Expenditure of Rs. 39.49 Lakhs. We have not deducted TDS on some of Transport Agency who has furnished PAN and payment made which is less then threshold limit. D. A=B+C It is pertinent to note that Amount of Rs. 48.61 Lakhs paid to S.K.Agency is already included in the figure of reimbursement of expenses of Rs. 58.03 Lakhs. e.g. Statement No. 1 dated 30/4/2010 Voucher no. April-74/10-11 Gross Amount 38762/- Less Service Tax Rs. 2187/- = Rs. 36575/- which is appeared in Statement No.6, Sr. No.1 dated 7/4/2010 and Rs. 38762/- appeared in Statement No.3. Both the figures that is Rs. 86.53 Lakhs and Rs. 88.11 Lakhs are different and it has got no connection with Rs. 86.53 Lakhs. Reason for the same is that Rs. 86.53 Lakhs C&F Expenses exclusively pertaining to M/s. S. K. Agency. Whereas, Rs. 88.11 Lakhs is a ....
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....issue under reference is covered in faovur of the assessee by the decision of Honorable Jurisdictional High Court/Tribunal as under. [1] CIT vs. Gujarat Narmada Valley Fertilizer Co. Ltd. 2013 35 Taxman 638 (Guj-HC). [2] M/s. Dhaanya Seeds Pvt. Ltd. vs. Dy. Commissioner of Income Tax, Bengalore. CO.No.55/Bang/2013 [3] CIT vs. Industrial Engineering Project Pvt. Ltd. (1993) 202 ITR 1014 (Del) [4] CIT vs. Fourtis Healthcare ltd. (2009) 181 Taxman 257 (Del). [5] CIT vs. DLF Commercial Project Corporation (2015) 379 ITR 538 (Del). [6] CIT vs. Information Architects (2010) 33 (i) 1TCL327 (Bom.HC). [7] CIT vs. Harbanslal Malhotra & Sons (P) Ltd (2013) 217 Taxman 112 (CAL) [8] CIT vs. Grandprix Fab (P) Ltd. (2010) 33 (ii) ITCL 90 (Del 'D' Trib) [9] Asst.CIT vs. Minpro Industries (2012) 43 (ii) ITCL 218 (Jod- Trib) [10] Bombay High Court CIT vs. SIEMENS Aktionage-sellschaft (2009) 310 ITR 320 (2009) 177 Taxman 81 (Bom) [11] CIT vs. Dunlop Rubber Co. Ltd. (1983) 142 ITR 493 (CAL). [12] Mahindara & Mahindra Ltd. vs. Dy. CIT (2009) 28 (ii) ITCL 421 (MUM-TRIB) (SB) [13] ....
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.... assessee did not object. Therefore we are inclined to restore the issue to the file of the AO for fresh adjudication as per law after verification of the agreement between the assessee and M/s. S. K. Agency. Learned DR also did not object, if the matter is restored back for fresh adjudication to the file of the AO by the provision of law. Given this, we restore this issue to the file of the AO for fresh adjudication by the law. Hence, the ground of appeal of the Revenue is allowed for statistical purposes. 7. Now we take up the grounds of appeal of the assessee in Cross Objection No.225/Ahd/2015 (in ITA No.3195/Ahd/2015) for A.Y. 2011- 12, which are as under: "1. That the learned C.I.T.(A)-4, Baroda has allowed the Ground No.(1) of the appellant following the decision of Hon'ble Gujarat High court in the case of C1T Vs. Gujarat Narmada Valley Fertilizers Co. Ltd. (2013) 35, Taxman Com.638 against, which no ground was raised in appeal by the department. 2. That the reimbursement of expenses to the consignment agent, which was in fact incurred on behalf of the appellant and there was no element of profit and hence there is no liability of T.D.S. U/s.200(1) a....