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2016 (8) TMI 646 - AT - Income TaxTDS u/s. 194H - Disallowance made u/s. 40(a)(ia) - Held that:- We find that the assessee had entered into an agreement with the principal on one hand and on the other hand agreements were signed with the subagents, that the subagents were to file monthly bills of travel expenses to the assessee, that she had to submit the bills to the principal, that the principal, on being satisfied about the genuineness of the expenditure, had to make a payment to the assessee, that assessee would be making the payments to the subagents as per the agreements entered into with them, that the AO had made some independent enquiries, that the subagents had admitted to have received the reimbursement, that the AO did not consider the said fact while passing the assessment order. The agreements, entered in to by the assessee with the principal and the agents, clearly indicates that the assessee was to reimburse the actual expenditure incurred by her subagents. In our opinion, there is no need to quote any authority to hold that no tax is to be deducted for reimbursing an expenditure. The AO had not brought on record that the reimbursement had income element embedded in it. It was pure and simple case of reimbursing the expenditure incurred by the sub-agents. We find that the FAA had clearly brought out the distinction between the commission received from the principal and the reimbursement received by the assessee, in his order. He has specifically held that provisions of section 194H of the Act would be applicable for the commission payment. In our opinion, his order does not suffer from any legal or factual infirmity. Therefore, upholding his order we decide the effective ground of appeal against the AO.
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