9911796707
TMI Blog2011 (5) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... rately, TDS was not required to be deducted from such reimbursement of expenses and as a consequence, Section 40(a)(ia) is not applicable with regard to such payments. the Tribunal decisions cited by the learned AR of the assessee rendered in the case of Modicon Network P. Ltd. [ 2007 (2) TMI 354 - ITAT DELHI] and Grandprix Fab P. Ltd.[ 2009 (10) TMI 74 - ITAT DELHI-D] also support the case of the assessee and hence, by following all the Tribunal decisions, we hold that no TDS is required to be deducted for reimbursement of expenses for which separate bills were raised by the commission agent and hence, the provisions of Section 40(a)(ia) is not applicable to such payments. Therefore, disallowance made by the Assessing Officer is to be dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 40(a)(ia) of the Act. In reply it was submitted by the assessee before the Assessing Officer that the said company has deducted the TDS on charges paid to C&F agents i.e. Ukinex Commercial Services. It was also submitted that regarding reimbursement of expense, the TDS is not required to be deducted in view of CBDT Circular No.715. Regarding the ocean freight, it was submitted that the payment was paid to non-resident company and hence, section 194C is not applicable to such payments. The Assessing Officer had noted at page no.3 of the impugned order that the assessee has failed to deduct TDS under Section 194C on the balance payment made to M/s.Ukinex Commercial Services, Mumbai of ₹ 6,96,957/- claiming that the same was in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt, the Tribunal has decided similar issue in favour of the assessee in the case of Modicon Network P. Ltd.,(supra). It is submitted that in the case of Grandprix Fab Pvt. Ltd. (supra), similar issue was before the Tribunal and it was held by the Tribunal in that case that there was no element of income embedded in reimbursement of expenditure and therefore, impugned payment regarding reimbursement of expenditure would not be disallowed under Section 40(a)(ia). As against this, the learned DR of the Revenue strongly supported the orders of the authorities below and the Board circular no.715 dated 8-8-1975. Our attention was drawn to question no.30 in the Circular where it was answered that reimbursement cannot be deducted out of the bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bursement of expenses and as a consequence, Section 40(a)(ia) is not applicable with regard to such payments. Other Tribunal decisions cited by the learned AR of the assessee rendered in the case of Modicon Network P. Ltd., and Grandprix Fab P. Ltd. (supra) also support the case of the assessee and hence, by respectfully following all the above Tribunal decisions, we hold that no TDS is required to be deducted in the present case for reimbursement of expenses for which separate bills were raised by the commission agent and hence, the provisions of Section 40(a)(ia) is not applicable to such payments. Therefore, disallowance made by the Assessing Officer is to be deleted. 8. In result, assessee's appeal is allowed. Order pronounced in Open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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