TMI Blog2019 (2) TMI 791X X X X Extracts X X X X X X X X Extracts X X X X ..... this year under consideration which was stated to be not incurred in immediately succeeding year i.e. AY 2014-15. The Revenue appeal is allowed for statistical purposes on this issue Disallowance of reimbursement of the expenses - assessee did not submit requisite details before the AO which led the AO with a view to check leakage of revenue to disallow 5% of these expenses - Held that:- We have observed that the assessee is clearing , forwarding and shipping agent. The assessee claimed net agency commission from its clients and also claimed reimbursement of the expenses. The assessee did not filed requisite details before the AO. The assessee has filed details of these expenses before us which was stated to have been claimed as reimbursement of expenses from its clients. The assessee has also filed some of the bills raised by it on its various clients to make home its point that these are merely reimbursement of expenses. The assessee has also contended that profit element embedded in these reimbursement of expenses to the tune of ₹ 13,08,911/- was offered for taxation and has already suffered taxation . The P&L account is placed on record in file. These details required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which may be necessary. 3. The brief facts of the case are that the assessee is a firm and is engaged in the business as clearing , forwarding and shipping agent. The AO observed from the Profit and Loss account that the assessee has claimed expenses of ₹ 75,40,109/- as against the net agency commission of ₹ 1,71,50,290/- earned by it, as detailed hereunder:- a) Custom Examination Expenses ₹ 2,54,122/- b) Dock Expenses - ₹ 5,29,228/- c) Documentation Charges ₹ 15,24,148/- d) Incidental Charges ₹ 2,92,165/- e) Sundry Expenses ₹ 4,38,165/- f) Container Grounding Expenses ₹ 6,26,505/- g) Transportation Expenses ₹ 38,75,776/- ₹ 75,40,109/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has earned net agency commission of ₹ 1,71,50,290/- which is arrived at after adjusting the reimbursement of the expenses claimed by the assessee from its clients. The assessee has debited expenses to the tune of ₹ 75,40,109/- in its Profit and Loss Account for the year under consideration , as under:- a) Custom Examination Expenses ₹ 2,54,122/- b) Dock Expenses - ₹ 5,29,228/- c) Documentation Charges ₹ 15,24,148/- d) Incidental Charges ₹ 2,92,165/- e) Sundry Expenses ₹ 4,38,165/- f) Container Grounding Expenses ₹ 6,26,505/- g) Transportation Expenses ₹ 38,75,776/- ₹ 75,40,109/- The AO had asked for the details of these e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate basis are made to cover up possible leakage. .According, an amount of ₹ 1,33,716/- being 5% of the above expenses are disallowed and added to the total income. We have perused this assessment order passed by the AO u/s 143(3) for AY 2014-15 . First of all the assessee has filed vouchers in this year i.e. AY 2014-15 before the AO albeit the same were self made vouchers but some of the expenses remained unverifiable for AY 2014-15 . While for AY 2013-14, no bills/vouchers were submitted by the assessee before the AO. There is another distinction in AY 2014-15 i.e. expenses were only to the tune of ₹ 26.74 lakhs while in the AY 2013-14 the expenses were threefold to the tune of ₹ 75.40 lacs. We have also observed a note worthy distinction in AY 2013-14 vis-a-vis AY 2014-15 , wherein we have observed that documentation charges to the tune of ₹ 15,24,148/-as well Transportation charges to the tune of ₹ 38,75,776/- were incurred by the assessee in the AY 2013-14 which were not claimed as reimbursements from clients , while we could not find any such expenses being incurred by the assessee in immediately succeeding year i.e. AY 2014-15 which is quite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Revenue who is aggrieved by the decision of learned CIT(A) in deleting additions as were made by learned AO. The learned counsel for the assessee has submitted before us the details of these expenses, Profit and Loss Account and sample invoices it raised on its clients to make home a point that these expenses incurred by the assessee were on behalf of its clients . It is also claimed that income embedded in these reimbursement of the expenses to the tune of ₹ 13,08,911/- was also offered for taxation by the assessee and no prejudice is caused to Revenue. The assessee has placed on record details of these expenses, claim of reimbursement of these expenses and income of ₹ 13,08,911/- embedded in these expenses which was transferred to Profit and Loss Account which is placed on record in the file. The said details were stated to have not been filed before lower authorities. The assessee relied upon the decision of Ld. CIT(A) while the Ld. DR relied upon the assessment order passed by the AO. 9. We have considered rival contentions and have perused the material on record. We have observed that the assessee is clearing , forwarding and shipping agent. The assessee clai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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