2015 (8) TMI 1458

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....1. The hon'ble CIT(A) has erred in confirming of Rs. 11,33,134/- u/s. 40(a)(ia) being the reimbursement of expenses paid to clearing and & forwarding Agents, reimbursed towards stamp charges, documents charges for custom, loading & Unloading charges and other miscellaneous expenses. The said expenses incurred are in respect of reimbursement and hence not subject to TDS. In view of this, the action of A.O. to invoke provision of Sec. 40(a)(ia) is unjust and to be unconfirmed. It is to be held so now and A.O. be directed to delete the addition." 3. The assessee company manufactures and supplies belt conveyer parts. The Assessing Officer took up scrutiny in its case. He found it to have paid a sum of Rs. 16,56,989/- to M/s Express Transport P....

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....se sections is to be deducted from the sum paid and reimbursement cannot be separated out of bill amount for the purpose of deduction of tax at source. But at this place I do not fully agree with the decision/observation of my Ld. Predecessor. In my opinion if any payments are made by the appellant towards custom duty or any other government dues through custom clearing and forwarding agent for clearing the imported goods etc. then it is not required to deduct the tax at source on such payments as no element of income is embedded in reimbursement of such expenses. In this regard the Hon'ble Delhi ITAT in appeal No. ITA No. 1208/2009 in the case of ACIT V Grand Prix Fab P Ltd. has clearly held that appellant is not obliged to deduct tax ....