TMI Blog2015 (11) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... are entities which are government and statutory authorities or local authorities covered u/s 10(20) or 10(20A) of the Act, but the assessee was not in a position to produce any evidence. It is well settled that when any assessee claims any benefit or exemption under any provision of the statute, it is for the assessee to produce the relevant documents or evidence, on the basis of which it is claiming such a benefit or exemption. However, in the present case, it is noticed that the AO in the assessment order nowhere stated that he asked the assessee to produce such an evidence - set aside this issue back to the file of AO, to be decided afresh in accordance with law, after providing due and reasonable opportunity of being heard to the assessee. - Decided partly in favour of assessee for statistical purposes. - ITA no. 1497/Del/2015 - - - Dated:- 29-10-2015 - SHRI N.K. SAINI: ACCOUNTANT MEMBER For The Appellant : Shri Permil Goel Adv. For The Respondent : Shri K.K. Jaiswal, Sr. DR ORDER This is an appeal by the assessee against the order dated 13-03-2014 of ld. CIT(Appeals)-Karnal. Only effective ground raised in this appeal reads as under: AO erred in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed to prove that TDS is not required to be deducted from the state govt. and the central govt. corporations. 4. The assessee also furnished the copy of the Circular no. 699 dated 30- 1-1995 issued by the CBDT. 5. The ld. CIT(A) asked the assessee to produce evidence that the Haryana Warehousing Corporation and Central Warehousing Corporation were entities, which were government and statutory authorities or local authorities covered u/s 10(20) or 10(20A) of the Act. 6. In response, the assessee furnished the written submissions, which read as under: That for non deduction of TDS from rent paid to Central Warehousing Corporation of ₹ 206452/- and ₹ 310356/- to State Warehousing Corporation the expenses have been disallowed and added as Income. The bare reading of Section 194-I is clear- The payee is the Government and under this bonafide impression the assessee did not deduct TDS. Similarly TDS on payment of ₹ 237757/- to NBHC a banking concern was not required as per our bonafide and common man feelings. This addition is also wrong. In our opinion these are directly Government concerns and cannot be called local authorities a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 40a(ia) of the Act. Now, the assessee is in appeal. 11. Ld. counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the assessee paid warehouse rent to Central Warehousing Corporation and Haryana Warehousing Corporation and it was under a bonafide belief that no tax was to be deducted at source u/s 194-I on rent paid to the government of India/ Haryana, amounting to ₹ 2,06,452/- and ₹ 3,10,356/- respectively and similarly, the assessee was also under bonafide belief that no tax was to be deducted at source u/s 194C on guards salary reimbursed to bank amounting to ₹ 2,37,757/-. It was further stated that in the tax audit report also in form no. 3CB in part-B at sl. No. 27(a), the auditor had mentioned Yes in response to the query of TDS compliance and had also mentioned in clause (b) Nil in response to query of TDS non-compliance. It was further submitted that nothing was payable as on 31st March, therefore, disallowance u/s 40a(ia), made by the AO, was not justified. Reliance was placed on the decision of the ITAT Visakhapatnam, Special Bench in the case of Merilyn Shipping Transport Vs. JCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C), where the Court had held that it is only the amount that exceeds the expenditure incurred by the agent that would be liable to tax. More recently, this Court in Fortis Health Care Ltd. (supra) has also held that amount received towards reimbursement of expenses is not taxable under the Act. 19. In the instant case, it is undisputed that M/s DLF Land Ltd. had deducted TDS on the payments made by it under various heads on behalf of the assessee. Further, it is also not disputed that the assessee deducted TDS on the service charge paid by it to M/s DLF Land Ltd. on the reimbursement expenses. In such circumstances, this Court holds that the entire amount paid by the assessee to M/s DLF Land Ltd. is entitled to deduction as expenditure. 20. In arriving at the aforesaid conclusion, this Court derives support from the Gujarat High Court s decision in Commissioenr of Income Tax-III v. Gujarat Narmada Valley Fertilizers Co. Ltd. (in Tax Appeal no. 315 of 2013, decided on 25-06-2013), where the facts were similar to those in the present case. The Court therein rejected the revenue s contention that non deduction of TDS on reimbursement expenses would lead to disallowance of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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