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2022 (6) TMI 1267 - AT - Income TaxTDS u/s 194I - Disallowance of expenditure representing reimbursement thereon u/s.40(a)(ia) - renting of equipments - assessee Company is in the business of providing Marine Seismic Services used for Research and Development to explore the utilisation of recourses available in sea and also provide complete Survey Solution including Bathmetry, Fishing Managements, Chase Boats and other related logistic services for data processing services required - As pleaded that the said mobilization charges are nothing, but reimbursement of expenses incurred by the owner of a vessel such as Fuel, Survey, arrangement of Expat Seismic Crew, Port charges, and various clearing charges from Naval & custom authorities to upgrade the Vessel so as to qualify as per Seismic norms prescribed under the contract - HELD THAT:- AO submitted before the lower authorities that the payment made by the assessee was duly shown as receipt by the ship owner company as its income and offered the same to tax. The ld. AR placed on record the profit and loss account and balance sheet of the ship owner company wherein this sum was included as income under the head ‘sale of services’ as on 31/03/2014 in the audited financial statements and a Chartered Accountant Certificate dated 27/12/2017 was also furnished in the prescribed format stating that recipient had duly offered to tax the said sum of Rs.2,57,55,269/- together with the PAN of the recipient company CIT(A) had merely reiterated the ultimate conclusions reached by the ld. AO without appreciating evidences filed by the assessee on record. But, the evidences filed by the assessee which are enclosed in the paper book filed before us together with the submissions thereon are staring on us which goes to prove clearly that the payments made by the assessee are nothing but reimbursements on which deduction of tax at source is not warranted. Hence, there cannot be any disallowance u/s.40(a)(ia) - we also find that the payee had duly reflected the said receipt as its income in its profit and loss account. This is also supported by the certificate from Chartered Accountant. Hence, on this count also there cannot be any disallowance u/s.40(a)(ia) of the Act in terms of second proviso thereon. Accordingly, the grounds raised by the assessee are allowed.
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