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2021 (6) TMI 456 - ITAT CHENNAIAddition u/s.40(a)(ia) in hire charges - HELD THAT:- AO after considering bill submitted by the assessee has accepted claim of hire charges and out of total expenses incurred for the year has allowed deduction for an amount - However, balance amount was disallowed in absence of bills and vouchers. The assessee has filed a paper-book which contains copies of bills issued by M/s. Vardhman Diesel & Generators, as per which the assessee has submitted bills and vouchers for total expenditure incurred by the assessee - Therefore, we are of the considered view that the AO was erred in disallowing part of expenses even though he has accepted claim of the assessee regarding part of expenses and has also accepted legal position that there is no requirement of deduction of tax at source on such payment. Disallowance of External service charges - HELD THAT:- It is an admitted fact that one cannot make profit by himself. Therefore, any payment by a Branch office to its Head office is a payment by self, which cannot be considered as a payment to a third party nor bring said payment within the ambit of TDS provision. But, the fact remains that assessee has to file necessary evidences including bills and vouchers to prove that said payment is reimbursement of expenses to its Head office for allocation of common expenses. In this case, the AO as well as the ld.CIT(A) has brought out clear facts to the effect that the assessee has failed to file necessary evidences including agreement between parties and bills & vouchers in support of its claim. The issue needs to go back to file of the AO to reconsider the issue that said payment is reimbursement of expenses to its Head office for allocation of common expenses to various Branch offices. In case, the assessee files necessary evidences to prove its claim, then the AO is permitted to cause necessary enquiries and take appropriate decision in accordance with law. Disallowance of payment made to related parties - HELD THAT:- We find that although the assessee claims it has reimbursed a sum to its Head office for allocation of common expenses incurred by Head office and charged off to various Branch offices, but failed to file any evidences including agreement, bills and vouchers in support of its claim. No doubt, payment by self cannot be treated as expenditure in order to invoke TDS provisions, but it is for the assessee to place necessary evidences before the AO to support its case. In this case, the assessee has not placed any evidences before the AO to support its claim. Therefore, we are of the considered view that the issue needs to go back to file of the AO to reconsider afresh in light of claim of the assessee that said payment is reimbursement of expenses to Head office for allocation of common overhead expenses to various Branch offices.In case, assessee files necessary evidences to prove its case, then the AO is directed to cause necessary enquiries and take appropriate decision in accordance with law.
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