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TMI Blog2014 (6) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... itself - So far as obligation to deduct tax at source form payment of transport charges and other charges was concerned, same was complied with by agent, who had made payment on its behalf – thus, there is no need to interference with the order of the CIT(A) – Decided against Revenue. - ITA No. 1045/Ahd/2011 - - - Dated:- 6-6-2014 - Sri D. K. Tyagi And Shri Anil Chaturvedi,JJ. For the Petitioner : Sri A.K. Pandey, Sr.D.R. For the Respondent : Sri M.K. Patel , A.R. ORDER Per : D. K. Tyagi, Judicial Member:- This is the revenue s appeal against the order of Ld. CIT(A)-XIV, Ahmedabad dated 11-01-2011 deleting the addition of Rs. 33,37,951/- being disallowance made u/s. 40(a)(ia) of the act. 2. Brief facts of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king into consideration the submissions of the assessee which have been reproduced by him in his order deleted this addition by observing as under:- 2.2 I have carefully considered the rival submissions. The evidences placed on record by the learned A.R. and the legal position have also been considered and perused. On perusal of the same, I find that the fact that since the appellant is a clearing and forwarding agent it has to make various expenses for clearing the goods for/on behalf of the clients, which expenses are then reimbursed by the clients and do not form part of appellant's profit is not in dispute. The fact that the expenses are incurred on behalf of the clients and the same are reimbursed is also not in doubt as eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of gross receipts of business in terms of what is to be included and what is to be excluded as laid clown by The Institute of Chartered Accountants of India in Para 5.11 of the Guidance Note on Tax Audit framed by ICAI which clearly and categorically says that in case of a clearing agent, reimbursement of customs duty and other charges collected by a clearing agent would not form part of his gross receipts in business. The decisions relied upon by the learned A.R, also reiterate the said position of law that reimbursements made to C F agents are not liable to TDS. In the light of foregoing discussion, I am in agreement with the learned A.R. that no TDS is required to be deducted in respect of reimbursement of expenses. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in favour of assessee and against the revenue by the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs Gujarat Narmada Valley Fertilizers Co wherein on similar facts hon'ble High Court has held that no part of amount reimbursed was to be disallowed u/s, 40(a){ia) if tax has not been deducted which is clear from the head notes of judgment which reads as under:- Section 40(a)(ia) of the Income-tax Act 1961-Business disallowance-Interest etc., paid to resident without deduction of tax {Reimbursement to expenses]-Expenses were incurred by agent on behalf of assessee-principal for transportation and other charges, which had been spelt out in bill itself-So far as obligation to deduct tax at source form payment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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