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2018 (12) TMI 1054 - AT - Income TaxTDS u/s 194C - non deduction of tds on the payment made to C&F agents - payment made to principal to principal - reimbursement of expenditure - Held that:- Mode of business of the assessee is that the customers desirous of sending their items to foreign countries used to approach the assessee, he then collects cargo from the customers and raises invoice on the customer along with airway bill on the basis of gross weight of cargo. The assessee thereafter sends such cargo to Clearing & Forwarding Agents (C&F Agents) for sending the same to the concerned foreign company as directed by the customer. The C&F Agents also incurred certain expenses where upon the C&F Agents raise invoices on the assessee broadly specifying two items; one being the agency charges and the other is the reimbursement of direct expenses. The assessee makes payments to such agents and the transaction thereby is completed. Thus it is a settled principle of law that the reimbursement of expenses to C&F Agents does not constitute income in the hands of the concerned C&F Agents and therefore TDS is not required to be deducted at source Reimbursement expenditure to the tune of ₹ 18,50,249/- is not liable to be disallowed u/s.40(a)(ia) as TDS is not required to be deducted since separate bills are raised by the commission agents. We, therefore, delete the addition made by the authorities below. As a result, the appeal is allowed in favour of assessee.
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