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2014 (6) TMI 771 - AT - Income TaxDisallowance u/s 40(a)(ia) of the Act – TDS on reimbursements - Claim of clearing and forwarding charges – TDS on transportation services was paid by the agent - Held that:- Following CIT vs. Gujarat Narmada Valley Fertilizers Co. Ltd. [2014 (4) TMI 235 - GUJARAT HIGH COURT] - on the commission paid by the assessee to the agent for clearing and forwarding tax was duly deducted - no part of amount reimbursed was to be disallowed u/s. 40(a)(ia) if tax has not been deducted - expenses were incurred by agent on behalf of assesses -principal for transportation and other charges, which had been spelt out in bill itself- So far as obligation to deduct tax at source form payment of transport charges and other charges was concerned, same was complied with by agent, who had made payment on its behalf – thus, the order of the CIT(A) is set aside – Decided in favour of Assessee. Addition of estimated disallowance of freight charges – Held that:- Assessee filed certain details but CIT(A) after scrutinizing them held that the accounts prepared by the assessee were not in order and since all the expenses were not fully vouched, AO was justified in making this adhoc disallowance of Rs. 6,27,500 - no evidence has been furnished to deviate from the findings of lower authorities and the order passed by CIT(A) is hereby confirmed – Decided against Assessee. Addition of 1/5th of total claim – Personal expenses - Held that:- The AO disallowed an amount of Rs. 82,880/- being 20% of the total claim - CIT(A) restricted this disallowance to 10% of total claim - personal element in this type of expenses cannot be ruled out – thus, the order of the CIT(A) is upheld – Decided against Assessee.
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