2015 (11) TMI 1361 - AT - Income Tax

TDS u/s 194C - breaking-up the bill into reimbursement and charges - payment made by the assessee towards freight to Forwarding and Clearing Agents - non deduction of TDS u/s.40(a)(ia) - Held that - The bills raised are clear-cut bills raised on the Assessees herein and they do contain the break-up of the various heads but nowhere is there a claim of reimbursement. Further, when a bill is raised by a Clearing and Forwarding agent on an Assessee, the bills is a consolidated bill. The Assessee cannot break-up the said bill into reimbursement and charges. This is because the Assessee is not in any way entitled to quantify the income of the Clearing and Forwarding agent. What is the commission of the Clearing and Forwarding agent from the airlines is not known to the Assessee. Similar is the case in respect of other expenses also. In these circumstances, the claim of the Assessee that the expenses are reimbursement and consequently are not liable for TDS would not be a ground for non-deduction of TDS. Further, in the Assessees own case for the earlier assessment year, on identical facts the co-ordinate bench of this Triunal had already taken decision and no change in facts have also been brought to the attention of the Tribunal. In fact, both the ld. DR and the ld. AR on behalf of the Assessees admit that the facts remain the same. - Decided in favour of revenue

Summary

Issues:
Appeal by Revenue against CIT(A) order for two companies regarding TDS on payment to Forwarding and Clearing Agents.

Analysis:
1. Grounds of Appeal by Revenue:
- Revenue raised grounds against CIT(A) order, arguing non-deduction of TDS on payment to agents.
- CIT(A) erred in deleting addition of payment without TDS deduction.
- Reference to CBDT Circular No. 715 and previous ITAT decisions.
- CIT(A) not following ITAT orders from earlier years.

2. Arguments by Revenue and Assessees:
- Revenue contested CIT(A) decision based on previous ITAT rulings.
- Assessees claimed payments were reimbursement, not subject to TDS.
- Assessees failed to prove reimbursement nature of payments.

3. Decision and Rationale:
- Tribunal analyzed bills from agents, found no evidence of reimbursement.
- Assessees unable to break down bills into reimbursement and charges.
- Tribunal upheld AO's disallowance based on lack of TDS deduction.
- Previous ITAT decision in Assessees' own case supported disallowance.

4. Conclusion:
- Tribunal reversed CIT(A) order and upheld AO's decision.
- Both appeals by Revenue allowed, orders pronounced on 5.10.2015.