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2012 (11) TMI 513 - AT - Income TaxNon deduction of TDS - transportation charges - reimbursement of expenses - security expenses, courier fees, bus hire charges, consultancy fees and accounting charges - Held that:- The said expenditure stands incurred only for and on behalf of the principal, who was obliged to reimburse the same in full, and indeed did so, so that there is no claim in respect to the same by the assessee per its return of income. As decided in ITO v. Dr. Willmar Schwabe India (P.) Ltd. [2005 (3) TMI 398 - ITAT DELHI-D] the reimbursable expenses, separately billed, would not be subject to tax deduction at source. Thus even though the assessee may be liable for tax deduction, which has not been deducted, where the same, whatever be the method of accounting or methodology employed, is not claimed as expenditure, there is no question of any disallowance in its respect - in favour of assessee. Transportation charges of Rs. 28,63,254/- Held that:- As it is not in the nature of payment to any third party, but only represents the deduction made by the principal on account of short delivery of stock and, therefore, is by way of transportation shortage, thus no question of application of sec. 40(a)(ia) - in favour of assessee. Transportation charges of Rs. 3,07,98,732/- Held that:- Even though the privity of contract may be between the assessee (whose obligation it is for the transportation of goods) and the transporter, rather, irrespective of whether the contract is between the assessee and the transporter or the principal and the transporter - the payment in either case being only in pursuance to a contract, the liability u/s 194C being on the person responsible for making the payment and not on the one who may finally bear it, so that it (the payment) could be on account of a different person, as the assessee's principal in the instant case, the disqualification and the consequential disallowance under section 40(a)(ia) would apply only where the claim for expenditure is preferred in its respect by the assessee. The matter, therefore, as in the case of other expenses forming part of the assessee's appeal, is restored back, on identical terms and scope, to the file of the Assessing Officer - in favour of revenue for statistical purposes..
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