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2023 (3) TMI 1308 - ITAT CHENNAITDS u/s 194C - payment made to both the parties for clearing and forwarding expenses - HELD THAT:- It is not a case of the AO that the assessee could not produce necessary bills and vouchers for entire expenditure debited into profit and loss account. In fact, the assessee could able to furnish necessary details along with bills and vouchers for majority of expenses. Therefore, AO is erred in disallowing part of expenditure for non-furnishing of vouchers for clearing and forwarding expenses and thus, we direct the AO to delete addition made towards disallowance towards clearing and forwarding expenses. Disallowance of C&F charges u/s. 40(a)(ia) - In this case, there is an agreement between the assessee and C&F agents for rendering certain clearing and forwarding services, which in our considered view is definitely a contract in terms of provisions of section 194C and thus, the assessee ought to have deduct TDS, when payment is made to C&F agents because the assessee is a person responsible for making payment for rendering services. Therefore, we are of the considered view that, there is no error in the reasons given by the AO and the CIT(A) to make addition towards disallowance of C&F charges u/s. 40(a)(ia) of the Act. As decided in case of Prahari Agency Private Limited [2021 (11) TMI 82 - ITAT CHENNAI] where it has been held that TDS is applicable u/s. 194C of the Act, for C&F charges and for non-deduction of TDS, expenses can be disallowed u/s. 40(a)(ia). Alternate plea of the assessee for disallowance of 30% in light of amendment to section 40(a)(ia) of the Act, by the Finance Act, 2014 w.e.f. 01.04.2015 - We find that said amendment is considered to be prospective in nature from assessment year 2015-16 onwards and thus, it is not applicable for the impugned assessment year as held in the case of Shri. Choudhary Transport Company [2020 (8) TMI 23 - SUPREME COURT] where it has been clearly held that amendment to section 40(a)(ia) of the Act, is prospective in nature which cannot be applied for retrospective purpose. Therefore, we are of the considered view that there is no merit in the alternate plea taken by the assessee and thus, same is rejected. Appeal filed by the assessee is partly allowed.
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