2014 (6) TMI 738

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..... s to different parties amounting to Rs. 29,94,378/- and Rs. 3,43,573/- respectively. When assessee was asked as to why on these payments tax was not deducted, assessee's contention was that these payments were reimbursed by the respective party who was the real owner of goods. Hence liability of deduction of TDS did not arise as they were not assessee's expenses. The AO did not accept the assessee's contention observing that assessee has shown income from reimbursement of expenses of Rs. 2,82,414/- which is netting of the receipt and payment. The gross receipt during the year was Rs. 1,62,49,168/- and payment made out of which was Rs. 1,59,66,754/-. The AO also rejected the contention of the assessee that he was not liable to tax audit u/s. .....

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..... he was of the opinion that the appellant ought to have deducted the TDS from the gross payment and then recovered the expenses from clients along with TDS. In this respect, I agree with the contention of the A.R. that the said observation of the A.O. is not in consonance with the provisions of section 194C since the appellant is not the "person responsible" for deducting TDS as per the provisions of section 194C of the Act, I further agree that the liability to tax at best can be only in respect of the payments made to the agency which is separately shown in the bills and not on the reimbursement of expenses. The argument of the A,R, that "when a C & F agent incurs expenses like the custom duty, port dues and sundry other charges, he's .....

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..... relied on the order of AO while learned counsel of the assessee relied on the order of Ld. CIT(A) and further submitted that view taken by Ld. CIT(A) is in line of the decision of this Bench in the case of Prayas Engineering Ltd vs. ACIT vide ITA No. 2825/Ahd/2007 dated 29/04/2014 wherein on similar facts addition made in respect of reimbursement of expenses has been deleted by the Tribunal. 5. After hearing both the parties and perusing the record, we find that there is no dispute about the fact that addition of Rs. 33,37,951/- has been made by the AO by invoking the provision of section 40(a)(ia) of the Act in respect of reimbursed expenses. On these facts ratio of Hon'ble jurisdictional High Court in the case of CIT vs. Gujarat Narmada .....

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