TaxTMI 
TaxTMI 
2018 (8) TMI 1625
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....Tax Act, 1961 (in short, 'the Act'), dated 06-01-2015. 2. The grievances raised by the assessee are as follows:- 1. For that the learned Commissioner of Income Tax (Appeals)-2 was not justified in confirming the order of the Assessing Officer in disallowing a sum of Rs. 18,16,096/-, under section 40(a)(ia), being amount paid to transporters on account of handling and warehouse collection charges in addition to freight on the ground that tax was not deducted at source from such payments u/s 194C of the Act. 2. For that the learned Commissioner of Income Tax (Appeals)-2 has also failed to appreciate the fact that the handling and warehouse collection charges paid to transporters having valid PAN formed part and parcel of the freight pay....
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....s, in addition to freight payable. The amount relating to freight has been debited under "primary freight expenses" and "secondary freight expenses", and the handling and collection expenses have been debited under "warehousing & collection charges". It is evident from the provisions of section 194C(6) that any sum paid to the contractor (transporter) for hiring vehicles for movement of goods is not eligible to TDS, subject to the condition that the transporter has furnished his PAN. Hence, there was no requirement for deduction of tax at source from such amounts credited and paid U/s 194C of the Act. However, the assessing officer rejected the contention of the assessee and the amount of Rs. 18,16,096/-, disallowed U/s. 40(a)(ia) of the A....
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....sessee has received PAN of the transporter, therefore, no TDS is attracted in the assessee`s case. 6. On the other hand, the ld.DR for the Revenue has primarily reiterated the stand taken by the assessing officer, which we have already noted in our earlier para, and is not being repeated for the sake of brevity. 7. Having heard the rival submissions and perused the material available on record. We note that the assessee has reimbursed the collection charges and pick up charges to the various transporters, and this fact can be verified from the copies of freight bills and ledger account of warehousing collection charges (pb.23). The reimbursement of expenses for and on behalf of assessee is not covered under the provisions of section 194C ....
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....,705.00 137.00 5.00 1,538.00 - 5,363.00 20/8/2004 388.00 806.00 41.00 5.00 2,030.00 - 3,270.00 20/8/2004 1,285.00 3,300.00 165.00 5.00 30.00 - 4,785.00 1/10/2004 812.00 2,640.00 133.00 5.00 2,823.00 - 6,413.00 10/11/2004 523.00 1,518.00 74.00 5.00 30.00 - 2,150.00 2/12/2004 1,078.00 2,200.00 112.00 5.00 30.00 - 3,425.00 25/12/2004 1,111.00 2,846.00 143.00 5.00 3,030.00 - 7,135.00 2/2/2005 843.00 2,200.00 112.00 5.00 30.00 25.00 3,215.00 15/2/2005 599.00 1,595.00 83.00 5.00 30.00 18.00 2,330.00 24/2/2005 1,111.00 2,035.00 102.00 5.00 30.00 31.80 3,314.80 31/03/2005 - - 1,254.00 60.00 2,315.00 123.00 3,752.00 31/03/2005 - - 641.00 29.00 2,16....
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....were not made towards any services rendered by the agent, but have been made to set off of the expenses incurred by the agent while clearing the imported goods from the customs for /on behalf of the assessee. Since no element of income is embedded in reimbursement of expenses incurred by agency for/on behalf of the assessee, the assessee was not obliged to deduct tax at source, and, therefore, the CIT(A) has rightly deleted the addition." 8. We note that provisions of section 194C of the Act is applicable, where payments is made to a contractor/sub-contractor, where contract is either a work contract or a contract for supply of labour. In the case before us, we observe that the assessee has reimbursed the expenses to its agent and it was ....