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2011 (2) TMI 830 - AT - Income TaxTDS us/ 194C - addition relates to C & F agency charges includes reimbursement and expenses - assessee was required to furnish the party-wise details of the expenses and explain whether any tax was deducted at source as required by section 194C of the Act - It was submitted that considering the nature of the expenses, no tax was required to be deducted at source - Revenue contended that since the assessee had not deducted the tax from the payments, the Assessing Officer invoked section 40(a)(ia) of the Act and disallowed the total amount- held that:- The contract between the assessee and the C & F agent is a service contract which has not been specifically included in Explanation III below section 194C. In this view of the matter, the provisions of section 194C are not applicable to the payments to the C & F agents. - assessee also took up the plea, without prejudice, that each of the payments as agency fees was less than Rs.20,000/- and the aggregate was also less than Rs.50,000/- and therefore even on that ground, the assessee was not required to deduct tax under section 194C The insurance premium paid in respect of the policies was claimed as a deduction as business expenditure and they appear to have been allowed in the preceding assessment years. However, in the year under appeal, the premium was not allowed as a deduction - Held that:- keeping in view the case CIT Vs. B.N.Exports [2010 -TMI - 76319 - BOMBAY HIGH COURT] premium paid under keyman insurance policy is allowable as a deduction in the case of partnership firm where policies are taken out on the lives of the working partners - thus,Appeal is dismissed.
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