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2013 (1) TMI 167 - AT - Income TaxDisallowance of freight charges in terms of section 40(a)(ia) - Non deduction of TDS - CIT(A) deleted the addition - Held that:- As from the various details filed by the assessee and nature of the assessee’s business of clearing and forwarding agents, it is found that the assessee is nothing but an intermediary between the exporters and the shipping lines. The assessee facilitates the contract for carrying goods for and on behalf of its client i.e. exporters or importers, and the principle contract for carrying goods is between the exporter/importer and the shipping lines. As decided in Commissioner of Income Tax vs. Cargo Linkers (2008 (3) TMI 619 - DELHI HIGH COURT) from the nature of the contract between the parties concerned it was found as a matter of fact that the contract was actually between the exporter and the airline, and the assessee was only an intermediary. It was, therefore, held that the assessee is not a person responsible for deduction of tax at source in terms of sec. 194C. Thus the present assessee, who is carrying on the business of clearing and forwarding agents, is not a person responsible for deducting the tax at source in terms of sec. 194C as the assessee is only an intermediary between the exporters and the shipping lines and it merely facilitates the contract for carrying the goods - provisions of sec. 40(a)(ia) cannot be invoked - in favour of assessee.
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