TMI Blog2013 (10) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities or it was paid for procuring the mangoes on behalf of the assessee .This vital fact is not clear from the bills or the order of the lower authorities - Matter is restored back - Decided in favour of Revenue. Disallowance expenses incurred through Credit Cards - Expenditure made on name of Directors - Held that:- AO had dis-allowed the said expenditure because he was of the opinion that expenditure was not incurred for wholly and exclusively for the business purpose. He has not alleged that expenditure incurred by the Directors was of personal nature. He has not brought on record anything to prove that said expenditure was not incurred for business purpose of the company. Mere making an allegation is not sufficient for fastening tax liability to an assessee. FAA had given a categorical finding that expenditure incurred on Credit Cards issued by the company was allowable expenditure.In our opinion,his order does not suffer from any legal or factual infirmity - Decided against Revenue. - ITA No. 2721/M/2009 - - - Dated:- 29-5-2013 - D Manmohan And Rajendra, JJ. For the Appellant : Shri Mohit Jain For the Respondent : Shri Nitesh S Joshi ORDER:- Per: Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments came under the category of contract and commission, that TDS was to be deducted on the same. After calling for the reply from the assessee, AO held that assessee had not deducted TDS on payment made by it, that payments made to the printer and supplier of the mango fell under the category of contract and commission, that the amount in question was required to be added to the total income of the assessee. AO noted that bill of HAKAMC included cost of fresh mango, Peeling, Sorting, Slicing, Salt and packaging, Handling, Weighing, Storage Charges, Freight and FPO specification charges and Commission charges, that rate of each item/work was separately charged in the bill. He held that these payments were clearly of composite nature including cost of mango and other contract work and commission, TDS that was required to be made for contract work/commission.He further noted that assessee had debited a sum of Rs. 2,17,413/- for clearing and forwarding expenses on which, tax was to be deducted. For non-deduction of TDS for above referred three items, he dis-allowed an amount of Rs. 8.57 and same was added to the total income of the assessee. 2.1.Assessee-firm preferred an appeal be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As far as the payment to printer is concerned, it is found that M/s. Jayant Printary had printed labels for chutney and other materials that were sold/exported by the assessee. Material for the labels was procured by the printer though the specification of the printing material was given by the assessee-company. In our opinion, considering the facts of the case, it cannot be held that it was a work contract. In the case of Glenmark Pharmaceuticals Ltd. (supra), same issue had arisen. Hon ble High Court of Bombay, has held as under: The crucial words in section 194C are "carrying out any work". The Explanation to section 194C inter alia defines the expression "work". By the Finance Act of 2009, which, substituted the provisions of section 194C, the expression "work" has now been defined in clause (iv) of the substituted Explanation. Clauses (a) to (d) are the same as clauses (a) to (d) of the erstwhile Explanation (iii). However, Explanation (e) has now been inserted. Clause (e) was introduced "to bring clarity on this issue" or, in other words, to remove the ambiguity on the question. Clause (e) as introduced contains a positive affirmation that the expression "work" will co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee had not paid nay amount to procurement agencies.In the present case, it appears that assessee had paid commission to HAKAMC as per the bills issued by the HAKAMC.It is not clear from the order of the AO/FAA as what was the nature of commission paid to HAKAMC.We feel that this aspect needs further verification. Whether the commission was paid only for carrying out certain processing activities or it was paid for procuring the mangoes on behalf of the assessee .This vital fact is not clear from the bills or the order of the lower authorities. Therefore, in the interest of justice, we are restoring back the matter to the file of the AO for fresh adjudication to look into the agreement/contract, if any, entered into between the parties to ascertain the true nature of the transactions. Part B of Ground No. 1 is allowed, in part, in favour of the AO. 2.5.The third item dis-allowed by the AO was about payments under the head Clearing and Forwarding .After considering the submissions of the DR and AR, we are of the opinion that payments were not in the nature of the work contract. We have also taken a note that out of the total amount of Rs. 2.17 Lakhs, assessee had claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness purpose. He has not alleged that expenditure incurred by the Directors was of personal nature. He has not brought on record anything to prove that said expenditure was not incurred for business purpose of the company. Mere making an allegation is not sufficient for fastening tax liability to an assessee. We find that after considering the submissions of the assessee and the documents submitted before him, FAA had given a categorical finding that expenditure incurred on Credit Cards issued by the company was allowable expenditure.In our opinion,his order does not suffer from any legal or factual infirmity. Therefore, upholding his order, we decide Ground No.2 against the AO. 4.The Last Ground of Appeal is about dis-allowance of Rs. 1.53 Lakhs made on account of foreign travel. During the assessment proceedings, assessee claimed an amount of Rs. 4.83 Lakhs under the head Conveyance and Travel Expenses out of which 4.76 Lakhs was for foreign travel including an amount of Rs. 3.07 Lakhs for foreign exchange purchased. He directed the assessee to furnish details of these expenses along with the proof that same had been incurred wholly and exclusively for the purpose of business ..... 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