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TMI Blog2022 (3) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... book. It is noted that the AO failed to contradict the explanation given by the assessee that the payments (freight charges) were paid by the agents on behalf of the assessee and that the assessee has only reimbursed the same to the agents. Since this fact could not be contradicted even during the hearing also we are inclined to allow this ground of appeal of the assessee by relying on the ratio of the decision given by the Tribunal in Satyendra Jhunjhunwala [ 2011 (11) TMI 703 - ITAT KOLKATA] . Estimation of profits - method of estimating/computing the profits - profits arising out of sale and purchase of tea, profits arising out of tea manufacture out of bought leave and profit arising out tea manufacture out of home grown leaves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pta, Sr. DR ORDER Per Shri A. T. Varkey, JM This is an appeal preferred by the assessee against the order of Ld. CIT(A)-2, Kolkata dated 18.07.2019 for AY 2013-14. 2. In respect of ground no. 1, according to the Ld. AR Shri Subash Agarwal, the AO erred in appreciating the fact that in this case as a matter of fact the agents of the assessee had incurred the transportation/freight charges and the assessee had only reimbursed the same i.e. freight/transport charges incurred by them was given back to the agents. Without appreciating this fact, according to Ld. A.R. the AO has disallowed the same u/s. 40(a)(ia) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) read with section 194C of the Act. According to Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clearing the imported goods from the customs for/on behalf of the assessee. Since no element of income is embedded in reimbursement of expenses incurred by agency for/on behalf of the assessee, the assessee was not obliged to deduct tax at source, and, therefore, the CIT(A) has rightly deleted the addition. He also relied on in the case of ITAT, Kolkata B Bench in ITA No.1580/K/2008, DCIT Vs. M/s. M. B. Ispat Corporation Ltd. Assessment Year 2005-06 dated 03.04.2009, wherein it has been held as under: We have carefully considered the submissions of the Ld. Representatives of both the parties and the orders of the authorities below. We have also perused the copy of consignment of sale agreement entered into by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of expenses cannot be regarded as revenue in the hands of the payee. While deciding the issue, the Hon ble High Court has followed the decision of Hon ble Delhi High Court in the case of CIT Vs. Industrial Engg. Projects P. Ltd. (202 ITR 1014). It is a settled proposition of law from the various decisions of High Courts and particularly the decision of Hon ble jurisdictional High Court (supra) that when there is no element of income and the payment is only as a reimbursement of expenses incurred by the payee, then no disallowance can be made u/s. 40(a)(ia). In the case in hand, the A.O. has not given a finding that the expenses were for office upkeeping as revenue receipt in the hands of Reliance Energy Ltd. and not a pure reimbursement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is aggrieved by the Ld. CIT(A) s action of confirming the addition of ₹ 23,14,859/- (as profits arising out of sale and purchase of tea), ₹ 41,93,950/- (profits arising out of tea manufacture out of bought leave) and ₹ 26,83,015/- (profit arising out tea manufacture out of home grown leaves). According to the Ld. AR, the assessee derives income from the three sources i.e. (i) trade/sale and purchase tea, (ii) manufacture of tea out of bought leave and (iii) tea manufacture out of home grown leave. According to the Ld. AR, the assessee has undergone scrutiny assessment for decades and the assessee has been following the same method of estimating/computing the profits which has not been disturbed in any of the earlier years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turbed the estimation of income made by the assessee without the AO pointing out the deviation or changes if any in the facts or law. According to this Tribunal if the facts permeating in the earlier years are identical/same and the department has accepted the same in the earlier years even in scrutiny proceedings, then the AO ought not to have disturbed the estimation made in this assessment year without pointing out changes/deviation in the facts or law while computing the income of the assessee from all the three sources. With this observation, I set aside the order of the Ld. CIT(A) and remand the issue back to the file of AO to de novo pass the order on this issue based on the observation (supra) and as per the Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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