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TMI Blog2015 (1) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1995” will not have application on the present facts as the bills are raised separately for reimbursement of expenses – the same has been decided in INCOME TAX OFFICER. Versus DR. WILLMAR SCHWABE INDIA PVT. LTD. [2005 (3) TMI 398 - ITAT DELHI-D] thus, CIT(A) is justified in deleting the disallowance – Decided against revenue. Commission payments made on sales – Held that:- CIT(A) rightly deleted the disallowance for the reason that the assessee has deposited the tax deducted within time stipulated as per the provision of Section 40(a)(ia) - the tax has been paid well before the due date furnishing of the return u/s 139(1) - proviso 1 to Section 40(a)(ia) is applicable - the proviso though it is applicable w.e.f. 01.04.2010, it has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,300/- u/s 40(a)(ia) on account of purported default in timely deduction and deposit of TDS. Total ₹ 27,16,937/- 4. Aggrieved by disallowance of the above said expenditure, assessee filed an appeal before the First Appellate Authority. The CIT(A) allowed the appeal of the assessee. The relevant findings of the CIT(A) on the two issues reads as follows. As regards disallowance of clearing and forwarding charges of ₹ 18,16,637/-. I have carefully considered the contention of the assessing officer and written submission of the appellant. The assessing officer is not justified in invoking the provisions of section 194C 195 of the IT Act and making a disallowance u/s 40a(ia) of the IT Act amounting to ₹ 18,16,637 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the written submission of the appellant and also perused the case laws relied upon by the appellant. In this case the appellant has deducted the tax also deposited the same within the stipulated time prescribed as per the provisions section 40(a)(ia). The Assessing Officer is unjustified in making a disallowance of ₹ 9,00,300/-. Therefore, the disallowance made is deleted. 5. The Revenue being aggrieved is in appeal before us. The Ld. D.R. supported the order of the Assessing Officer. On the other hand, Ld. A.R. reiterated the submissions made before the Income Tax Authority and relied on the findings of the CIT(A). 6. We have heard rival submission and perused the material on record. As regards the disallowance of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion at source regarding changes introduced through Fiannce Act, 1995 . The said circular in reply to question no.30, provided as under: Sections 194C and 194J refer to any sum paid. Obviously, reimbursements cannot be deducted out of the bill amount for the purpose of tax deduction at source. 6.3 The aforesaid circular was applicable only where the consolidated bills are raised for the gross amount inclusive of contractual payments as well as reimbursement of actual expenses. The same would therefore, not be applicable to the facts of the present case where bills are raised separately for the reimbursement of expenses incurred by payee. 6.4 The following judicial pronouncements support the view that circular No.715 (supra) will n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. Dr. Willmar Schwabe India (P.) Ltd. (Supra) held as under: After considering the rival submissions and perusing the relevant material on record, we find no infirmity in the impugned order of learned CIT(A) on this issue. It is observed that as agreed by and between the assessee company and M/s. Indochem Techno, Conslutants Ltd., a vehicle was to be provided by the assessee company to the said consultant for attending to its work and thus, the assessee company was to bear the vehicle expenses actually incurred by the said party. Bills for such expenses incurred by the said consultant were separately raised by them on the assessee company in addition to bills for fees payable on account of technical services and sine the amount of bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had entered into an agreement with the firm M/s Sangeeta Traders to provide commission on sales made to them. As per the terms of agreement, commission @ 1.5% of the sales was to be credited to the account of the firm at the end of the financial year i.e. on 31st March of every year after deduction of tax at source. The assessee has followed this policy and credited commission of ₹ 9,41,828/- to the account of M/s Sangeeta Traders on 31.03.2007. Tax on the aforesaid amount of commission was duly deducted u/s 194H on 31.03.2007 and deposited on 21.05.2007 to the credit of central government. The A.O. however, held that the assessee should have provided commission separately for a period upto Feb. 2007 and should have deducted and depo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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