2009 (11) TMI 908 - AT - Income Tax

Summary

Issues Involved:
The appeal filed by the Revenue against the order of the CIT(A) for the Assessment Year 2005-06 regarding the addition made u/s 40(a)(ia) of the Income-tax Act, 1961.

Clearing and Forwarding Charges:
The assessee debited clearing and forwarding charges without deducting TDS. The AO disallowed expenses totaling &8377; 61,02,884/- due to non-deduction of TDS. The CIT(A) deleted the addition of &8377; 50,95,316/- stating that it was reimbursement of actual expenses, not clearing and forwarding charges, and therefore not subject to TDS u/s 194C.

Interest Expenses:
Interest expenses of &8377; 1,16,364/- were paid without deduction of TDS. The AO concluded that TDS should have been deducted and paid in time. The CIT(A) did not uphold this disallowance, and it was not a subject of dispute in the final order.

Commission Expenses:
Commission expenses of &8377; 71,538/- were paid after TDS deduction but deposited late. The AO disallowed this expense under section 40(a)(ia). The CIT(A) did not uphold this disallowance, and it was not a subject of dispute in the final order.

Conclusion:
The ITAT Ahmedabad upheld the CIT(A)'s decision to delete the addition of &8377; 50,95,316/- as reimbursement of actual expenses, not subject to TDS u/s 194C. The Tribunal found no illegality or infirmity in the CIT(A)'s order and dismissed the Revenue's appeal.