9911796707
TMI Blog2012 (7) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... essee submitted that the AO disallowed a sum of Rs. 2,42,27,428 on the ground that the assessee has not deducted tax while making the payments. According to the learned representative, the assessee is engaged in the business of transport of goods within the State of Kerala. The assessee has its own branch and also franchisees at various places in the State. The franchisees would receive and deliver the goods transported by the assessee at the rate fixed by the assessee. The franchisee has also received money for loading, unloading, door delivery expenses and delay in taking delivery apart from the rate fixed by the assessee for transportation. According to the learned representative, the franchisees receive the goods for transportation toge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in law it is not commission at all. According to the learned representative, even for the storage of the goods beyond certain period, the franchisees would collect demurrages. However, no part of the demurrages is paid to the assessee. The entire demurrages would be retained by the franchisees on their own. Therefore, according to the learned representative, the franchisees receive the goods on their own and collect the money and after deducting their commission and expenditure, if any, only the actual transporting charges are paid to the assessee. For accounting purpose, the assessee has shown the payment retained by the assessee as commission, but, in fact, it is not commission. 4. Referring to the decision of the Special Bench of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the time of payment. Since the tax was not deducted, the AO disallowed the entire payment of the commission under s. 40(a)(ia) of the Act. The learned representative further submitted that the calculation sheet furnished by the assessee shows that the commission was allowable at 5 per cent of the net booking. Therefore, it is not correct to say that the assessee has not paid any amount at all. The assessee has not furnished the details before the AO for payment of commission. Therefore, the AO disallowed the payment of commission under s. 40(a)(ia) of the Act. 6. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the AO disallowed the claim of the assessee under s. 40( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the relevant accounting period there cannot be any disallowance under s. 40(a)(ia) of the Act. Accordingly, the orders of authorities below are set aside and the addition made by the AO is deleted. 7. The next issue is with regard to disallowance of rent paid by the assessee. 8. We heard Shri R. Srinivasan, the learned representative for the assessee and Smt. S. Vijayaprabha, the learned Departmental Representative. The main contention of the learned representative for the assessee is that the rent claimed was already paid before 31st March. Therefore, in view of the decision of the Special Bench of this Tribunal at Visakhapatnam in Merilyn Shipping and Transports (supra), there cannot be any disallowance. It is not in dispute that rent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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