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TMI Blog2015 (2) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... ts with respect to the reimbursable expenditure was also before the Co-ordinate Bench Tribunal in the case of Gujarat Narmada Valley Fertilizer Company Ltd [2015 (2) TMI 1 - ITAT AHMEDABAD] held that on pure reimbursement of expenses no TDS is deductable. Against the aforesaid order of Tribunal, the matter was carried before Hon’ble Gujarat High Court by the Revenue who accepted the finding of Tribunal and dismissed the appeal of Revenue [2014 (4) TMI 235 - GUJARAT HIGH COURT]. Considering the aforesaid facts, we are of the view that the assessee’s contention that the expenditure which are on account of reimbursement and on which no TDS has been deducted needs to be re-examined de-novo. We therefore remit the issue to the file of AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following grounds:- 1. The order passed by the CIT(A) is erroneous in law and on facts and therefore, requires to be suitably modified. It is submitted that it be so done now. 2. The CIT(A) erred in confirming the action of the learned Assessing Officer for disallowing amount paid under the head, clearing and forwarding charges of ₹ 33,29,238/- u/s. 40(a)(ia) which are primarily of reimbursement of expenses on the ground that no TDS has been deducted form such payments. It is submitted that in the facts and circumstances of the case, the appellant was not required to deduct the tax from reimbursement of expenses incurred by the agent and thus there is no default and hence no disallowance was called for. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 34,16,650/-. He also noticed that the aforesaid aggregate amount was paid/credited to the account of various parties listed at page 3 of the assessment order. He also noticed that assessee had only deducted TDS on ₹ 87,412/-. The assessee was therefore asked to show cause as to why assessee has not deducted TDS and no disallowance u/s. 40(a)(ia) be made to which assessee inter alia submitted that assessee was required to deduct TDS only on the charges paid as agency charges and the other amounts paid to the C F agency was in the nature of reimbursement and therefore no TDS was required to be deducted. The submission of the assessee was not found acceptable to the AO as he was of the view that assessee was liable to deduct T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt paid to clearing and forwarding agents are liable for TDS. Assessing officer reproduced these question answers in his assessment order. It is surprising that appellant did not touch upon this part of circular number 715 in its detailed submission. This means appellant has nothing to say in this matter. Appellant referred section 204 and claimed that what is chargeable to TDS is income of the clearing and forwarding agent and not his gross receipt. This is wrong interpretation by the appellant since section 204 only defines the person responsible for paying. Payment of any other sum chargeable under the provisions of this act does not mean Income of the recipient. Payment for contract work is chargeable to TDS under section 194C. It ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h circular number 715 do not leave any scope for confusion, any sum paid by the appellant to clearing and forwarding agent is liable for TDS. In view of this the decision of ITAT Delhi is not applicable in this case. Another decision of ITAT Delhi relied upon by the appellant is in respect of payment made to foreign shipping companies. Since appellant is making payment to Indian clearing and forwarding agent, the said decision does not help the appellant. Appellant also referred decision wherein Calcutta High Court held that circulars are not conclusive and binding if the same is not in construction with statute. Here this circular is not in confrontation with any provision of IT act and therefore the validity of circular number 715 cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but AO did not consider the submissions of the assessee. Ld. AR further submitted that on identical facts in the case of Gujarat Narmada Valley Fertilizer Company Ltd, the issue has been decided in favour of the assessee by the Hon ble Ahmedabad Tribunal (in ITA No. 1003/Ahd/2010). He also placed on record the copy of the aforesaid decision. He therefore submitted that the matter may be remitted to the file of AO with direction to consider the submissions of the assessee and thereafter decide the issue. Ld. DR on the other hand supported the order of AO and Ld. CIT(A) . 8. We have heard the rival submissions and perused the material available on record. Before us, it is assessee s submission that the amount paid to C F agents includes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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