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TMI Blog2017 (6) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... ource on payments made by the assessee to C&F agents. 3. Facts apropos are that the assessee, a manufacturer and seller of centrifuged latex, had filed its return of income for the impugned assessment year, declaring income of Rs. 70,89,989/-. An assessment u/s. 143(3) was completed on 21/12/2011, computing total income of the assessee at Rs. 77,87,140/-. Thereafter, the assessment was re opened for a reason that shipping freight of Rs. 9,70,828/- was paid without deducting tax at source. During the course of assessment proceedings, it was noted by the Assessing Officer that assessee had paid Rs. 60,80,063/- as clearing and forwarding charges to one M/s. Mark Logistics. Claim of the assessee before the Assessing Officer was that these wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of CIT vs. Narmada Valley Fertilizer Co. Ltd. (361 ITR 0192), the CIT(A) held that for re-imbursement of expenditure, deduction of tax was not required. He deleted the disallowance made u/s. 40(a)(ia) of the Act. 5. Ld. DR, assailing the order of the CIT(A), submitted before us that assessee had paid Rs. 60,80,063/- for the services received by the assessee from M/s. Mark Logistics, which were contractual in nature. According to him, these were not reimbursement of expenditure and even if it was reimbursement, as per the Ld. DR, there would have been profit booking by M/s. Mark Logistics in-built in the billings. In his opinion, Assessing Officer has rightly considered the payments as liable for deduction of tax at source u/s. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing amounts from you towards RE-IMBURSEMENT of expenditure incurred by us on your behalf, on which we have deducted tax at source, wherever applicable. Date wise list is enclosed separately. Documentation charges 10,854 Postage, courier, grounding charges 181,300 Certificate of origin, invoice legislation etc. 24,300 Transportation by road in goods carriage 2,681,528 Self stuffing charges 80,400 Sundry charges 217,700 Tally wages paid 44,500 Handling charges paid 489,497 Other expenses 2,349,984 Total (Rs.) 6,080,063 Yours faithfully, (Authorized signatory (Name and designation For MARK LOGISTICS sd/- Shaji Kurian Manager Enclosure List of amounts reimbursed by you as stated above" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the case of DCIT vs. Dhanyaa Seeds (P) Ltd. (supra). Hon'ble Gujarat High Court in the case of Pr. CIT vs. Consumer Marketing (India) (P.) Ltd.(supra) held that when separate bills are there for reimbursement of expenditure received by C&F agent, TDS was not required to be made on reimbursement. It is an admitted position in the case before us that assessee had in addition to reimbursement of expenses, separately paid brokerage and commission Rs. 2,52,410/- which was subjected to disallowance in the original assessment. Considering all these, we are of the opinion that the CIT(A) was justified in deleting the disallowance made u/s. 40(a)(ia) of the Act. We do not find any reason for interference with the order of the CIT(A) . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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