2012 (6) TMI 704

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..... TDS is required to be made when bills are raised separately by agents for reimbursement of actual expenses incurred by them. Decided in favor of assessee.
R. P. Tolani, Shamim Yahya, JJ. Ved Jain and V. Mohan, CAs for the Appellant R. S. Negi, Sr. DR for the Respondent ORDER Shamim Yahya, Accountant Member 1. This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals) dated 28.3.2011 pertaining to assessment year 2008-09. 2. The issue raised is that Ld. Commissioner of Income Tax (Appeals) erred in deleting the disallowance of ₹ 48,61,509/- made u/s. 40(a)(ia) in respect of freight on export outward on which no tax was deducted at source. 3. In this case Assessing Officer d .....

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..... rt of CBDT Circular No. 715 dated 08.8.1995 as per which TDS is required only in cases where bills are raised for gross amount inclusive of professional fees as well as reimbursement of actual expenses and accordingly no TDS is required to be made when bills are raised separately by agents for reimbursement of actual expense incurred by them. The Hon'ble High Court has also observed that there is no element of profit involved in such bills relating to reimbursement of actual expenses. The ratio of the above judgement is applicable to the instant case. Similar decision has also been taken by the Hon'ble ITAT in a number of cases cited by the Ld. Authorised Representative. Thus, as per the statutory provisions contained in section 194 .....

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..... 08.8.1995 provide that the TDS is required to be made, only in cases where the bills are raised for gross amount inclusive of professional fees as well as reimbursement of actual expenses and accordingly no TDS is required to be made when bills are raised separately by agents for reimbursement of actual expenses incurred by them. Accordingly, no TDS is required to be raised. Thus, we find ourselves in agreement with the order of the Ld. Commissioner of Income Tax (Appeals) that disallowance of ₹ 48,61,509/- cannot be sustained. Accordingly, we uphold the order of the Ld. Commissioner of Income Tax (Appeals) and decide the issue in favour of the assessee. 7. In the result, the appeal filed by the Revenue stands dismissed. Order pr .....

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