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TMI Blog2011 (12) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... tely maintained for reimbursement, the provisions of section 194 C and 194J of the Act shall not be applicable ignoring the fact that the answer to question no. 30 of the said circular only means that TDS has to be made u/s. 194C and 194J of the Act even if bills are raised for gross amount including reimbursement 2. i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made on account of penalty of ` 6,02,511/- on violation of the bye-laws of the stock exchange, which are statutory in character and thus amounted to infringement of law". ii. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in ignoring the fact that the penalty is imposed under SE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual expenses, TDS is not deductible on such reimbursement of actual expenses. Accordingly, the disallowance made by the Assessing Officer was deleted. 4 Before us, the ld DR has relied upon the order of the Assessing Officer as well as the decision of the Hon'ble Patna High Court in the case of Associated Cement Co. Ltd. v. CIT reported in 120 ITR 444. 4.1 The ld AR of the assessee, on the other hand has submitted that an identical issue has been considered and decided by the coordinate Bench of the Tribunal in the case of Utility Powertech Ltd in ITA No.2561/Mum/2009 vide order dated 19.4.2010. He has filed a copy of the order of the Tribunal. He has also filed a copy of the agreement between the assessee and the holding company regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly agreed upon." 5.2 Thus, it is clear from the records as well as the findings given by the CIT(A) that the amount in question is only reimbursement of the actual expenses and there is no element of any margin or profit. The coordinate Bench of the Tribunal in the case of Utility Powertech Ltd (supra) wherein one of us (Judicial Member) is the party and author have considered and decided an identical issue by following the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs M/s Siemens Aktiongesllschaft as under: "5. We have considered the rival contentions and perused the record. The jurisdictional High Court In the case of CIT vs. Selmens Aktiongeseiischaft (supra) has held that reimbursement of expenses cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding character; therefore, it is for violation of statutory provisions and infraction of law and as per Explanation to sec 37 payment made to stock exchanges cannot be allowed. He has relied upon the order of the Assessing Officer. 7.1 On the other hand, the ld AR of the assessee has submitted that violation of bye-laws of Stock exchange does not amount infraction of any law because this is a statutory provision. He has further submitted that the Tribunal, in a number of cases, have held that penalty paid to Stock Exchange for violation does not amount to penalty for infraction of law and in the case of CIT vs Angle Capital & Debit Market Ltd, the Hon'ble jurisdictional High Court vide order dated 28th July 2011 has upheld the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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