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TMI Blog2020 (1) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... see had deducted tax at source on payment of rent, interest, contract labour charges, freight and forwarding charges at a lower rate and not at the rate prescribed under the relevant provision. Thus from the aforesaid facts it becomes clear that it is a case of short deduction of tax and not a case of non deduction of tax. Therefore, as held in the case of CIT vs. S.K. Tekriwal [ 2012 (12) TMI 873 - CALCUTTA HIGH COURT] , no disallowance under section 40(a)(ia) can be made for short deduction of tax at source. Applying the ratio of the aforesaid decision also, the disallowance made by the Assessing Officer under section 40(a)(ia) is unsustainable. As regards payment of sales commission, it appears from record that the payment made is towards incentive / turnover discount to authorized channel partners by way of credit note subject to achievement of certain targets. Thus, the payment made does not come strictly within the meaning of brokerage / commission. The decision of Hon ble Jurisdictional High Court in case of CIT vs. Intervet India P. Ltd. [ 2014 (4) TMI 353 - BOMBAY HIGH COURT] clearly supports this view. - Decided in favour of assessee. - ITA no.6374 /Mum./2017 (Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ractice followed, the employees submit their claim with regard to travel and conveyance expenses within a period of 3 to 4 months of travel and settled their advances or claim reimbursement towards additional expenditure incurred by them. From the aforesaid facts, it appears that the amount in dispute was actually paid to the employees during the year, though, the claims of the employees in respect of such expenditure were not received. However, that by itself does not make the provision for expenditure contingent in nature. The factual aspect of the issue was verified by ld. Commissioner (Appeals) and he has concluded that the expenditure has crystallized during the year. The Revenue has also not brought any material on record to show that any part of the aforesaid expenditure was claimed by the assessee in the succeeding assessment year. In view of the aforesaid, we do not find any infirmity in the decision of ld. Commissioner (Appeals) on the issue. Ground raised is dismissed. 4. In ground no. 2 to 6 the Revenue has challenged deletion of various disallowances made under section 40(a)(ia) in respect of the following expenditures debited to profit loss account. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... labour charges to Genius Consultants Limited, learned Commissioner (Appeals) noticed that the assessee has deducted tax at a lower rate on the basis of the certificate issued by the department allowing deduction of tax at a lower rate. Further, he observed, before him the assessee accepted that it has not deducted tax at appropriate rate for payment of ₹ 43,34,050/ and accordingly agreed for disallowance of the said amount. Considering the submissions of the assessee, learned Commissioner (Appeals) restricted the disallowance of ₹ 43,34,050/ . As regards freight and forwarding charges paid of ₹ 28,95,203/ , Ld. Commissioner (Appeals) found that the payments are not in respect of freight and forwarding alone but includes reimbursement of octroi and entry taxes. Thus considering the submission of assessee learned Commissioner (Appeals) restricted the disallowance to ₹ 59,62,589/ as against ₹ 88,57,792/ made by the Assessing Officer. As regards disallowance of sales commission, learned Commissioner (Appeals) found that the payment represents incentives/turnover discounts given to the authorized channel partners by way of credit note subject to achieve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wance made under section 40(a)(ia) of the Act and thereafter granted partial relief to the assessee. Thus, he submitted, there is no flaw in the decision of learned Commissioner (Appeals) on the issue. As regards disallowance of sales commission, the learned Authorised Representative submitted, on factual verification learned Commissioner (Appeals) has found that the payment made is not in the nature of brokerage or commission. Therefore, he has deleted the disallowance. 8. We have considered rival submissions and perused the material on record. It is evident, the Assessing Officer has made disallowance under section 40(a)(ia) in respect of various payments made by the assessee during the year, either for short deduction of tax or non deduction of tax. The facts on record also make it clear that in respect of payment of rent, interest and contract labour charges, the assessee had deducted tax at a lower rate on the strength certificate issued by the department permitting deduction of tax at lower rate. In respect of freight and forwarding charges, part of the payment was towards reimbursement octroi/entry tax. It is also evident, in course of appeal proceeding, in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it is a case of short deduction of tax and not a case of non deduction of tax. Therefore, as held by the Hon ble Calcutta High Court in the case of CIT vs. S.K. Tekriwal, 361 ITR 432, no disallowance under section 40(a)(ia) can be made for short deduction of tax at source. Applying the ratio of the aforesaid decision also, the disallowance made by the Assessing Officer under section 40(a)(ia) is unsustainable. As regards payment of sales commission, it appears from record that the payment made is towards incentive / turnover discount to authorized channel partners by way of credit note subject to achievement of certain targets. Thus, the payment made does not come strictly within the meaning of brokerage / commission. The decision of Hon ble Jurisdictional High Court in case of CIT vs. Intervet India P. Ltd. 2014 49 taxmann.com 14 (Bombay) clearly supports this view. Nothing contrary has been brought to our notice by the learned Departmental Representative. In view of the aforesaid we uphold the decision of learned Commissioner (Appeals) on the issue. Grounds raised are dismissed. 9. In the result, Revenue s appeal is dismissed. Order pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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