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TMI Blog2016 (11) TMI 660X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, labourers and others, on behalf of the assessee and none of them accrued to the agent. In our view the above payment will also not be liable to TDS. The Assessing Officer has neither quantified nor clear of the exact charges paid to M/s. Al Mustafa Agencies. In the absence of any material on record, we uphold the view of the Ld. CIT(A) in this regard. Vehicle loan hire charges - CIT(A) has held that hire purchase payment would not come within the meaning of section 194C for the purpose of tax deduction - Held that:- In our view merely because a claim for the hire charges portion has been made in the account, it cannot be stated that such payment are liable to TDS. Further the assessee has been claiming such payment in earlier years also which has been accepted by the department. The legislature thought it fit to introduce Form 26a with effect from 01/04/2013, for obtaining certificate from the receiver to the effect that they have included such receipts as part of their income. The verdict of Ld. CIT(A) on this score has also to be upheld. Revenue appeal dismissed. - ITA No. 509/Coch/2015 - - - Dated:- 26-9-2016 - Shri B. P. Jain, AM And George George K., JM Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure of ₹ 1,14,07,877/- under the head plant repairs. According to the Assessing Officer the assessee firm is liable to deduct tax on this expenditure paid to M/s. Geo Acquatic. During the assessment proceedings, it was explained to the Assessing Officer that this amount comprises of reimbursement of expenses to M/s. Geo Acquatic as per list enclosed. M/s. Geo Acquatic is processing marine product for the assessee by virtue of an agreement. According to the Assessing Officer the assesses is having the contract for processing, freezing and storing the marine products for export by the firm, which are mentioned in the agreement. According to the Assessing Officer, one each of the bill raised by M/s. Geo Acquatic, item wise charges under various heads are mentioned. The Assessing Officer concluded that this is the nature of work and on this the assessee is liable to deduct tax at source. Further, she concluded that bills raised by M/s. Geo Acquatic is a consolidated one and hence on the entire amount of tax has to be deducted under sec. 194C. 4. The Ld. CIT(A) in his order has partly allowed the various issues raised by the assessee against which the Revenue is in app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied in a case where addition is made u/s. 40(a)(ia) of the Act. 9. It was also submitted that sec. 40(a)(ia) of the Act has been amended from 01.04.2013 by which no addition should be made unless the assessee was deemed to be in default and the recipient having filed their return of income within the due date. In the assessee s case, the recipient was an assessee on record by PA number and the amendment being procedural applies for all pending cases. 10. It was also submitted that the assessee had actually paid the entire amount to M/s. Geo Acquatic before the close of the previous years. So much so nothing is outstanding, and having regard to the decision of the Hon ble Supreme Court in the case of CIT vs. Vector Shipping Services Pvt. Ltd., the provisions of sec. 40(a)(ia) are not applicable. Copy of the decision of the Hon ble Supreme Court and Hon ble Allahabad High Court of the same enterprise were filed. Copy of the decision of the Chennai Bench of ITAT in the case of Thekkathir Press Madras was also referred to. As the case law stands today by verdict of the Hon ble Supreme Court the disallowance is not warranted. Reliance was also placed on the Jurisdictional High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. He also referred to the decision of ITAT Delhi Bench in the case of ITO vs. Willmar Schwabe India (P) Ltd. to the effect that reimbursement of expenses does not attract the provisions of TDS. He also referred to the decision of ITAT Delhi Bench D in the case of DLF Commercial Projects to this effect. Reference was also placed on the decision of the Hon ble Kerala High Court in the case of Muthoot Fincorp Ltd., Trivandrum, wherein the Hon. Jurisdictional High Court have given a direction to Assessing Officer to verify the nature of reimbursement of expenses in that case where separate bills have been raised. The ACIT, Cir(1) TVM by her order dated 11/08/2014 have given effect to the order of Hon. High Court wherein she had also referred to various decisions at Page 3 of the order and concluded that since the assessee raised separate bills for reimbursement of expense they are not liable to deduct tax and deleted the addition made u/s. 40(a)(ia). It was argued that the assessee has also given separate bill and therefore the provisions of TDS are not applicable for them also. 14. The second issue relates to deletion of clearing and forwarding charges paid to M/s. Al Mustafa agen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses. Reimbursement of expenses comprises of various items like storing charges, peeling charges, flake ice charges, utility of lab and consumables, re-glazing and hardening repacking charges, tunnel, lab charges, maintenance, disposal expense, generator charges etc. Agreement 3b to h prescribes the rate for all these activities. In our view this agreement is based on the parties having regard to the actual expenses incurred. The processing charges paid is separately billed on which TDS has been deducted. Having regard to the fact that separate bills have been given and based on various Judicial Pronouncements cited by the Ld. AR and having regard to the fact that the revenue has accepted this fact of separate bill is another case as directed by the Jurisdictional High Court. We are of the considered opinion that the assessee is not liable to deduct tax on reimbursement of expenses to the tune of ₹ 11407877 and accordingly, we uphold the decision of the Ld. CIT(A) in this regard. 17. With regard to the addition of cleaning and forwarding charges to Al Mustafa Agencies, the amount paid is in the nature of documentation charges, customs charges, payment for trailer and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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