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2014 (11) TMI 763 - AT - Income TaxReopening of assessment u/s 147 - Change of opinion - Held that:- Explanation 2(c)(iii) to section 147 of the Act clearly says that income chargeable to tax has escaped assessment where an assessment has been made but excess relief was granted under the Act - In case the reopening is within four years Explanation 1 & 2 of section 147 would come into operation - Therefore, wherever excess relief was granted the assessing officer can rectify the same by reopening the assessment u/s 147 of the Act - Since excess relief was granted without considering the provisions of section 40(a)(ia) of the Act, the AO has rightly reopened the assessment. Amount paid for air and freight to three companies TDS not deducted Disallowance u/s 40(a)(ia) Held that:- The agreement entered into between the assessee and Three Star Corporation clearly says that Three Star Corporation has to bear the actual freight from Cochin Airport - it is not the liability of the assessee to meet the expenditure of freight charges - the freight charges are the liability of Three Star Corporation - As per the agreement, Three Star Corporation has to pay the freight charges along with weekly bills to the assessee in dollars - Section 194C provides for deduction of tax by any person responsible for making payment for carrying out any work in pursuance of a contract. When Three Star Corporation is liable to pay the freight charges as per the arrangement / agreement and the assessee was required to pay the amount initially to the respective companies whether the assessee is liable to deduct tax or not Held that:- The purchaser has to pay the freight charges in addition to the price agreed upon the contention of the assessee cannot be accepted that the assessee is not expected to deduct tax - Liability to pay the money is different from responsibility to pay the money - Section 194C requires the person responsible for paying the money and it does not requires to deduct tax by the person who is liable to make money - Since the assessee is responsible for making the payment, this Tribunal is of the considered opinion that the assessee is expected to deduct tax u/s 194C of the Act - There is no further disallowance required provided the assessee credited the reimbursement of freight charges under the head income from other sources as claimed by the ld.representative for the assessee - it needs to be verified whether the assessee credited the amount as "Income from other sources thus, the matter is remitted back to the AO for verification Decided in favour of assessee.
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