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2016 (11) TMI 529 - AT - Income TaxDisallowance towards freight expenses u/s. 40(a)(ia) - CIT(A) had deleted all the disallowances only on the ground that the expenses were paid by the assessee before the end of the previous year - Held that:- Hon’ble Calcutta High Court in the case of CIT Vs. Crescent Exports Syndicate [2013 (5) TMI 510 - CALCUTTA HIGH COURT ] wherein it has been held that the provisions of section 40(a)(ia) of the Act would be applicable even if amounts were paid before the end of the previous year. In respect of payments made to Port Management Board we are convinced on verification of the invoices given by Port Management Board that the said payment is made towards supply of fresh water to the ships. Hence, the same does not fall under the ambit of deduction of tax at source under any of the provisions of the Act. Hence, disallowance made u/s. 40(a)(ia) of the Act to that effect is deleted. In respect of payments made towards stevedoring charges, we find that the ld AO had not given any finding in his order as to how the subject mentioned expenditure would fall under the ambit of provisions of deduction of tax at source. Accordingly, we deem it fit and proper to set aside this issue to the file of the ld AO to give a clear finding in this regard in the light of the evidence submitted by the assessee with regard to the subjection mentioned expenditure. In respect of payments made to Indian Register of Shipping we are convinced that the said party had given a certificate u/s. 197(1) issued by the I. T. Department wherein payments made to them has to be made without deduction of Tax at source which has been clearly mentioned. Hence, there is no violation of provision of section 194C of the Act warranting any disallowance u/s. 40(a)(ia) of the Act. In respect of payment of freight charges we are in agreement with the argument of the Ld. AR which was also considered by the Ld. DR that the issue requires fresh examination by the AO as to whether the payment exceeded in the aggregate of ₹ 50,000/- in respect of each party thereby warranting any deduction of tax at source in terms of section 194C of the Act. It is true that no such finding was given in the assessment order in this regard. Accordingly, we deem it fit and proper to set aside this issue to the file of AO to decide this issue afresh in accordance.
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