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TMI Blog2018 (11) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 1,05,106 on account of interest on the ground that the assessee company has not charged any interest on the advance given to Smt. Razia Tak and Smt. Shaista Badar. The CIT(A) has also erred in upholding the same. 4) That, the AO/CIT(A) failed to appreciate in making the disallowance of interest at Rs. 1,05,106.00 that the said payment to the parties are in the nature of advance against the purchase of property. 5) That, the Assessing Officer has erred in law and on facts in making the addition/ disallowance of Rs. 1,88,355/- on account of Clearing & Forwarding Charges and Other Expenses on the ground that assessee in default in not deducting the TDS U/s 194C whereas there is no liability of the assessee company to deduct the TDS on the said payment as per the provisions of Section 194C. 6) That, the Assessing Officer has erred, in view of the facts and circumstances, in law and on facts in making the addition/ disallowance U/s 40(a)(ia) of the Act of Rs. 22,08,831/- on account of Shipping/IHC Charges paid to the foreign shipping company and Clearing & Forwarding Charges on the ground that assessee in default in not deducting the TDS U/s 194C whereas there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -. The assessee preferred an appeal before the learned commissioner of income tax appeals who wide order dated 1/12/2014 partly allowed the appeal of the assessee. The assessee aggrieved with the order of the Commissioner of income tax appeals preferred an appeal before us. The only 3 issues are involved in this appeal (1) Disallowance of Rs. 1 05106/- confirmed by the learned commissioner of income tax appeals on account of interest for not charging interest on advances given to Mrs. Razia Tak and Shaista Badar. (2) disallowance of Rs. 1 88355/- on account of clearing and forwarding charges and other expenses on the ground that the assessee has not deducted tax at source under section 194C of the income tax act (3) the disallowance confirmed by the learned commissioner of income tax under section 40 (A) (i.e. a) of the act of rupees 2208831 on account of shipping and IHC charges paid to a foreign shipping company and clearing and forwarding charges on the ground that assessee has not deducted tax at source under section 194C of the income tax act. 5. Vide ground number 3 of the appeal the assessee has challenged the confirmation of the disallowance of Rs. 105106/- on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shown to us that when the land was actually purchased by the assessee. In view of this, the argument of the learned authorised representative remains unsubstantiated. It is also fact that assessee has not charged interest on these advances and has paid huge bank interest. In view of this, we do not find any infirmity in the order of the lower authorities in confirming the disallowance of Rs. 1 05106 on account of interest. Accordingly, ground number 3 and 4 of the appeal of the assessee is dismissed. 9. The disallowance of Rs. 1 88355/- is challenges per ground number five of the appeal. The learned authorised representative could not show that where the disallowances been made by the learned assessing officer of this amount separately. In view of this, the ground number 5 of the appeal of the assessee is dismissed. 10. Ground number 6 of the appeal challenges the conformation of disallowance of Rs. 2208831. The learned assessing officer noted during the course of the assessment proceedings that the assessee is importing scrap and assessee has debited the expenses on account of haulage charges and shipping line charges and clearing agent charges in respect of those purchases am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shipping charges on its own account however it is stated that the charges have been paid to Maersk India private limited on behalf of the seller of the goods. He stated that information contained at para number 7 of the assessment order shows that assessee has credited the account of Royal tax private limited for the entries dated 23/8/2009, 26/8/2009 and 7/9/2009. He further submitted that the other two entries noted by the learned assessing officer are for wholly charges. He further submitted that none of the bills has been raised by the recipient of the income on the assessee but they are on the sellers. Therefore, he submitted that assessee has purchased goods, which included all the expenditure on account of the sellers. As the assessee has paid the purchase price of the goods and not freight haulage Charges et cetera no tax is required to be deducted by the assessee and therefore there cannot be any disallowance. 12. The learned departmental representative vehemently submitted that if the assessee is not required to make payment then assessee should have made all the payment to the suppliers and wide has made payment to the various parties for freight and wholly charges. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver and above the price for the purchases of goods as reimbursement of expenditure, which has been incurred by the supplier for supply of goods to the assessee. However, the crux of the matter is that whether the high seas purchase of goods purchased by the assessee had the liability of payment of freight and agency charges on the supplier of the goods or on the assessee. If it is on the assessee then assessee should have deducted tax at source, if it is on the parties who supplied the goods and they agreed to supply the assessee the goods at a particular destination, then it was their duty to deduct tax at source on these payments. Based on the information available before us, it is not clear that whose liability it was to defray all these expenditure. We fully agree with the orders of the law authorities that on these sums tax should have been deducted at source. But the crux of the issue is that we should have deducted tax at source on this payments. Even otherwise, according to the proviso to section 40 (a) (ia) if the recipient of the income has paid tax on these income then the disallowance cannot be made in the hands of the assessee. In view of above facts, we set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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