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TMI Blog2018 (11) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case, the learned CIT(A) erred in deleting the disallowance of Rs. 4,27,30,166/- made u/s 40(a)(ia) of the Act, in respect of payments made for reimbursement of expenses to clearing house agents without appreciating the fact that TDS was not deducted on the above payments although the clearing and forwarding agents are subjected to deduction of tax at source u/s 194C of the Act." 3. The solitary ground of appeal of the assessee is pertained to disallowance of Rs. 42730166/- u/s. 40(a)(ia) of the act in respect of payment made for reimbursement of expenses to clearing house agent without deduction of tax 4. The fact in brief of the case is that the assesse has filed return of income declaring total income of Rs. 87,83, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant bills raised by the C & F Agent and it has to be shown with exact amount of expenditure incurred by each agent was reimbursed by the appellant and bills were separately raised by the C & F Agent for reimbursement of each expenditure and for service charges payable to them. The Hon'ble ITAT "D" Bench, Ahmedabad has directed the AO that if the arjgeJIant J,e.Eimco -Elecon (India) Ltd. is able to establish these two ingredients, then section 40(a)(ia) of the Act is not applicable in respect of reimbursement of expenditure. From this decision of the Hon'ble ITAT "D" Bench, Ahmedabad it can be said that in case if exact amount of expenditure incurred by CHA has been reimbursed by the appellant and bills are separately raised by t ..... 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 on non deduction of Tax at source. It is noticed that the assessee has not deducted tax at source as the bills raised by the clearing and forwarding agent were in respect of reimbursement of actual expenses incurred by them on behalf of the assessee. We observe that these facts demonstrate that there was no element of income involved in such reimbursement transaction. During the course of appellate proceedings before us, the learned counsel has placed reliance on the decision of Co-ordinate Bench of the ITAT in the case of Prayas India Ltd. vs. Addl. CIT ITA No. 2674/Ahd/2011. He has also placed reliance on the decision of Hon'ble High Court in the case of Principal CIT-1 vs. Consumer Marketing Pvt. Ltd. Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of TDS deduction. The case file reveals that a co-ordinate bench of the tribunal in assessee's own case for preceding assessment year in ITA 2825/Ahd/2010 decided on 29-04-2014 holds similar reimbursements made to be very payee as not covered by TDS provisions. The Revenue fails to point out any distinction on facts. We observe in these circumstances that the Commissioner of Income Tax(A)'s action in part is not liable to be upheld on both counts i.e. merits as well as judicial consistency. The assessee's sole substantive ground succeeds" 7. The Hon'ble High Court in the case of Principal CIT-1 vs. Consumer Marketing Pvt. Ltd. Tax Appeal No. 646 of 2015 dated 21/09/2017 has held that since the reimbursement bills were separately rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has deleted the addition made by the assessing officer. The relevant part of the decision of ld. CIT(A) is reproduced as under:- "5.2. I have gone through the facts of the case, the AO's observations and the submission made by the AR. So far as ground no. '3' is concerned, the appellant's contentions that no order u/s. 201 for the F.Y. 2006-07 could have been passed after 31/03/2011 is correct. Accordingly, the order of the Assessing Officer declaring the appellant as "assessee in default" for amount deducted but not paid is directed to be deleted as being time barred. 5.2.1 But so far as order u/s. 201(1A), vide which the Assessing Officer has levied int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file correction statement as the online system is not allowing the processing of TDS statement for F.Y. 2006-07. Under such circumstances, the appellant has rightly filed a rectification petition before the Assessing Officer which has to be considered by the Assessing Officer for giving consequential relief to the appellant. 5.2.3. Accordingly, the Assessing Officer is directed to verify from the banks as to whether the claim of the appellant of having deposited TDS amounts through challans, copies of which have been submitted during the appellant proceedings as well as before the Assessing Officer are correct or not.- On such challans being found correct, the Assessing Officer will provide consequential relief to the appellant by passing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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