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TMI Blog2013 (8) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... pective parties - impugned payment is reimbursement of the expenses and are not the commission as the concerned party did not give any services in respect of the payment of expenditures made. Providing services is essentially requirement of the nature of transaction of a commission. Since this condition is not satisfied in the case under consideration therefore it is a case of reimbursement of the expenses incurred by the concerned party on behalf of the assessee - Decided in favour of assessee. - ITA No.434/Agr/2011 - - - Dated:- 11-5-2012 - Shri Bhavnesh Saini And Shri A. L. Gehlot,JJ. For the Appellant : Shri Pankaj Gargh, Advocate For the Respondent : Shri A. K. Sharma, Jr. D.R. ORDER Per A. L. Gehlot, Account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the case of the assessee was not reimbursement of actual expenses incurred by consignee, but a fixed percentage of commission was paid irrespective of the actual expenses incurred by the consignees. Therefore, the assessee is liable to deduct tax as per the provisions of section 194H of the Income Tax Act, 1961 ( the Act hereinafter). The Assessing Officer relied upon a CBDT Circular No.715 dated 08.08.1995. Since the assessee was liable to deduct tax at source and the assessee has failed to deduct the tax at source, therefore, the said amount is disallowable under section 40a(ia) of the Act. The CIT(A) confirmed the order of the Assessing Officer as under:- (CIT(A) paragraph no.3.1) I have analysed the matter and find that after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Issue involved in this appeal is with regard to the disallowance of payments of ₹ 38,75,000/- towards brokerage and ₹ 2,43,253/- towards commission on non-deduction of TDS by invoking the provisions of section 40a(ia) of the Act. The assessee s case was that the entire brokerage in commission payments were actually paid during the financial year excepting an amount of ₹ 1,78,025/- which remained payable as on 31.3.2005. The claim of the assessee was rejected by the revenue resulting in an appeal before us by the assessee. Following the majority view of the special bench, the provisions of section 40a(ia) cannot be invoked with respect to the aforesaid payments which were actually paid during the financial year but it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the year and no amount is payable on the last day of previous year. On this ground also the addition is wrong, illegal and deserves to be deleted. 6. The above ground no.5 raised before the CIT(A) is identical to the ground no.2 raised before us. 7. In the light of above discussion and after considering totality of the facts of the case, we find that factual verification is required in the light of decision of I.T.A.T. cited supra. We, therefore, think it proper to send this issue back to the file of the Assessing Officer with the direction to verify the facts of the case and decide the issue in accordance with the decision of I.T.A.T., Special Bench Visakhapatnam after providing opportunity of hearing to the assessee. 8. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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