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TMI Blog2018 (5) TMI 1541X X X X Extracts X X X X X X X X Extracts X X X X ..... eshpande Revenue by : Dr. Vivek Aggarwal ORDER PER D. KARUNAKARA RAO, AM : This appeal filed by assessee is directed against the order of Commissioner of Income Tax (Appeals), Pune-5 dated 25.02.2016 for assessment year 2007-08. 2. The assessee has raised following grounds in appeal: DISALLOWANCE UNDER SECTION 40(a) OF THE ACT ₹ 5,60,269/-: 1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax Appeals [hereinafter CIT(A)] erred in upholding the disallowance made by the learned AO of ₹ 5,60,269/- to M/s. Imperial Packers u/s.40(a) of the IT Act. The learned authorities failed to appreciate that this amount merely represented reimbursement of expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard. 4. Aggrieved with the order of CIT(A), assessee is in appeal before us raising above extracted grounds. 5. Relevant facts pertains to the addition of ₹ 5,60,269/-. The assessee run a Magazine named Osho Times magazine. The assessee reimbursed the postage expenses amounting to ₹ 15,75,910/-. Out of this, an amount ₹ 10,15,415/- was reimbursed to Osho International Foundation and ₹ 5,60,269/- reimbursed to M/s. Imperial Packers. For the purpose of circulation of magazine named Osho Times magazine, the assessee used the services of M/s. Imperial Packers who worked as Courier service provider. The assessee paid ₹ 5,60,269/- to the said organization for the purpose of postal expenses. As in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks on behalf of the assessee-company and payment received is towards the services rendered by it. The CIT(A) held that the assessee failed to substantiate with evidence that the payment made to M/s. Imperial Packers constitutes reimbursement of actual postage. From the copies of invoices raised by M/s. Imperial Packers, the CIT(A) observed that the company hired an agent for its mailing work and therefore, payment towards the service is not reimbursement. The CIT(A) opined that the payment made to M/s. Imperial Packers falls within the ambit of section 194C of the Act and justified the decision of Assessing Officer invoking provisions of section 40(a) of the Act. The contents of Para 4.2 are relevant in this regard. 6. Before us, the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g TDS on the payment ₹ 5,60,269/- made to M/s. Imperial Packers. The case of the assessee on this issue is that it is a case of reimbursement by Company to M/s. Imperial Packers as the expenses are borne already by the M/s. Imperial Packers on behalf of the party. Non- requirement of making TDS made by the Company as well as the Reimbursement nature of the bill-wise clearly was also indicated on the face of cash invoice raised by M/s. Imperial Packers. Further the Reimbursement bill for Osho International Foundation is same in line with the reimbursement bill of M/s. Imperial Packers and both the reimbursements are on accounts of postage expenses on actual usage. 9. Considering the same, we are of the opinion that there is no case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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