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2014 (9) TMI 208 - DELHI HIGH COURTCharges paid to clearing and forwarding agents disallowed u/s 40(a)(ia) – TDS not deducted u/s 194C - Held that:- Payment made to a travel agent or airline for purchase of the air ticket for travel was not required to be subjected to deduction of tax at source - in case of a chartered flight or bus etc., provisions of Section 194C would be attracted - Payment made to clearing and forwarding agents for carriage of goods would be subjected to tax at source u/s 194C of the Act - The Tribunal has held that the bills, subject matter of the dispute were for reimbursement of the air freight charges paid to airlines - Air freight charges would not include commission, handling or other charges, which were payable for the services rendered by the clearing and forwarding agents - For the services, separate bills were issued and tax at source was deducted u/s 194C - The payment towards air freight was required for exporting the goods as the respondent assessee was an exporter and the consignor – relying upon Commissioner of Income Tax Vs. Hardarshan Singh [2013 (1) TMI 314 - DELHI HIGH COURT] - on applying principle of privity of contract, mere reimbursement of charges would not require deduction of taxes at source - the parties had raised separate bills, which were reimbursed, as it was paid to the airlines for export of goods - the factual findings of the Tribunal are correct and the plea and stand taken by the Revenue is incorrect and wrong – the order of the Tribunal is upheld – Decided against revenue.
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