TMI Blog2014 (7) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the income tax case is based on addition made in excise case of the assessee, which is pending in appeal before the Excise and Custom Tribunal - it would be justified to restore the issue in the grounds of the appeal of the assessee to the file of the CIT(A) with direction to decide the afresh in accordance with law on merit in the light of the order of the Excise and Custom Tribunal – Decided in favor of Revenue. - ITA No.2295,2359/Ahd/2012 - - - Dated:- 20-6-2014 - Mukul Kr Shrawat And N S Saini, JJ. For the Appellant : Shri K C Mathews, Sr. DR For the Respondent : Shri K C Thaker, AR ORDER:- PER : N S Saini These are the cross-appeals filed by the Revenue and the assessee against the order of the Commissioner of Income Tax (Appeals) dated 20.07.2012. 2. Ground no. 1 of the appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) directing the Assessing Officer to verify and allow the disallowance u/s. 40(a)(ia), if the expenditure is paid by 31.03.2009 without considering the fact that TDS provision u/s. 194C were not complied with by the assessee. 3. The brief facts of the case are that the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Schwabe India (P) Ltd. (2005) 95 TTJ Delhi 53. It was also submitted that circular no. 175 dated August 8, 1995 question no. 30 specifically requires that from the total payment, reimbursement of actual expenses be deducted for the purpose of arriving at the amount liable to TDS. Therefore, it was argued that TDS was required to be made only on payment made to the clearing agent for services rendered by them and not on the reimbursement of expenses made to them. 4. The Assessing Officer did not accept the said explanation of the assessee and by invoking the provisions of section 40(a)(ia) of the Act, made a disallowance of expenses incurred towards inland haulage charges of ₹ 23,60,227/- and Container Corporation of India Ltd. charges of ₹ 3,54,510/- and thereby made a total disallowance of ₹ 27,14,737/-. 5. On appeal, the Commissioner of Income Tax (Appeals) deleted the disallowance by following the decision of the Vishakhapatnam Special Bench of the Tribunal in the case of Merilyn Shipping Transports Limited Vs. ACIT (2012) 136 ITD 23 (Vishakhapatnam)(SB) on the ground that provisions of section 40(a)(ia) are not applicable and should not be invoked to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s reimbursement of expenses made by the assessee to the clearing agent of the assessee. This plea of the assessee was not adjudicated by the Commissioner of Income Tax (Appeals) as he allowed the appeal of the assessee by following the decision of Vishakhapatnam Special Bench of the Tribunal in the case of Merilyn Shipping Transports Limited (supra). Therefore, we set aside the orders of the lower authorities and remand the matter back to the file of the Commissioner of Income Tax (Appeals) to adjudicate the issue afresh whether the assessee was liable to deduct tax at source on amount of ₹ 27,14,737/- paid as reimbursement of expenses to the clearing agent or not. The Commissioner of Income Tax (Appeals) shall allow reasonable and proper opportunity of hearing to both the parties before adjudicating the issue afresh. Thus, this ground of Revenue s appeal is allowed for statistical purposes. 9. Ground no. 2 of the Revenue s appeal reads as under: On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) has erred in excluding the gas expenses and depreciation from the total expenses and to apply the ratio of res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has also erred in making references to the order of the Commissioner (Appeals), Central Excise, being material extraneous to the assessment record, and thereby ignoring the settled position of law that the order once passed has to stand on its own reasoning and cannot be supplemented by fresh reasons. 8. The learned C.I.T. (A) has also erred in ignoring a number of judicial pronouncements including those of the Jurisdictional High Court cited in the written submissions filed before him while proceeding to dispose off the appeal. 9. The learned C.I.T.(A) has also erred in not giving due and appropriate consideration to the alternative contentions taken without prejudice to the main contentions, to the effect that the alleged suppression of sales could be computed only to the extent relatable to the sales made to the thirteen (13) parties (whose statements are relied upon by the AO), and that the element of profit thereon could not be taken to be more than the book-result disclosed by the appellant and duly accepted by the Assessing Officer. 10. On the facts and in the circumstances of the case and in law the addition confirmed to the extent of ₹ 1,11, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales as determined by the Excise Authority are challenged before the Excise Tribunal that has not attained finality. Under such circumstances ld. CIT(A) ought to have quashed addition made simply on the basis of unaccounted sales quantified by excise department without any evidence on record of alleged suppressed sales. 2. Alternatively and without prejudice it is submitted that the ld. CIT (A) ought to have taken into account submission of the appellant to compute addition at average Net Profit ratio of 5.29% for last six years in place of 25% of Gross Profit of alleged unaccounted sales. The order of ld. CIT (A) being prejudicial erroneous deserves to be quashed. 3. The learned counsel for the assessee submitted that whole addition is based on the addition made in the excise case of the assessee, which is pending before the Excise and Custom Tribunal. She submitted that matter may be restored to the AO for fresh consideration in accordance with the decision of Excise and Custom Tribunal, which is yet to be pronounced. The learned DR could not controvert the submissions of the learned counsel for the assessee. 4. We have considered rival submissions an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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