TMI Blog2009 (11) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... gents without appreciating the fact that the payment made to C F Agents amounted to contractual payment and on which TDS was required to be deducted as per provisions of section 194C of the Act. 2 The facts of the case are that the assessee debited clearing and forwarding charges to the tune of ₹ 61,02,884/-. On being asked to submit the break-up, the assessee submitted that the same is on account of custom duty, clearing and forwarding charges and transportation charges. The AO found from the verification that custom duty was separately included in purchases hence custom duty again included in the break-up of clearing and forwarding charges is not correct and accordingly he treated ₹ 61,02,884/- as clearing and forward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : 1 Clearing and forwarding charges ₹ 61,02,884/- 2 Interest expenses ₹ 1,16,364/- 3 Commission expenses ₹ 71,538/- As regards clearing and forwarding charges, appellant has given further break-up as under: 1) Reimbursement of expenses ₹ 50,95,316/- (wrongly mentioned as custom duty In the beginning before AO) 2) Clearing and forwarding charges ₹ 5,02,550/- 3) Transportation charges ₹ 5,05,018/- Appellant submitted evidences in the form of debit notes issued by C F agents along with their confirmations that this amount was received by them from the appellant towards reimbursement of expenses incurred on behalf of appellant. From the details of these expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses incurred by C F agents was by way of separate bills and had nothing to do with clearing and forwarding charges. Since such reimbursement of expenses are actually expenses of the appellant but initially paid by the agents, do not require deduction of tax. Since there was no liability to deduct tax on such reimbursement of expenses, the same will not be disallowable u/s 40(a)(ia) and accordingly the addition of ₹ 50,95,316/- made by the AO is deleted. 3 The learned DR before us relied on the order of the AO. The learned AR, on the other hand, supported the order of the CIT(A). 4 We have heard the rival submissions of both the parties and carefully considered the same. We have also perused the material on record. We noted t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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