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Satyendra Jhunjhunwalla Versus Income-tax Officer, Wd-46 (4) , Kolkata

TDS u/s 194C - disallowance of freight charges u/s. 40(a)(ia) - non-deduction of TDS where the freight charges includes Octroi tax paid to Maharastra Government by the transporters and reimbursed by the assessee - Held that:- The issue of reimbursement of customs duty charges and other charges which are incurred by agents on behalf of assessee cannot be subject matter of TDS. See Assistant Commissioner of Income-tax Versus Grandprix Fab. (P.) Ltd. [2009 (10) TMI 659 - ITAT DELHI] - Disallowa .....

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nce of ₹ 8,388/- out of coolie and cartage expenses and sustained the disallowance as made by Assessing Officer in respect of general expenses i.e. ₹ 2,918/-. Since lower authorities have made the disallowances in absence of proper evidence, we find no need to interfere with the same and the same is hereby upheld. These grounds of assessee’s appeal are dismissed. - I.T.A No. 1988/Kol/2009 - Dated:- 11-11-2011 - C. D. Rao (Accountant Member) And Mahavir Singh (Judicial Member) For the .....

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rming disallowance of freight charges and clearing charges by invoking provisions of section 40(a)(ia) of the Act on account of non-deduction of TDS. For this, assessee has raised following ground nos. 1 and 2: 2. For that the Ld. C.I.T(A) was not justified in not deleting the disallowance of freight charges of ₹ 62,285/- u/s. 40(a)(ia) on account of non-deduction of TDS where the freight charges includes Octroi tax paid to Maharastra Government by the transporters and reimbursed by the as .....

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ties on which TDS was not deductible. 3. We have heard rival submissions and gone through facts and circumstances of the case. We find that the Assessing Officer noticed that the assessee has paid freight charges at ₹ 62,285/- and clearing charges at ₹ 6,71,261/- to M/s. Inland Road Transport Pvt. Ltd. and M/s. J. S. Clearing Services respectively. According to Assessing Officer, the assessee is liable to deduct TDS u/s. 194C of the Act but he has not deducted TDS and hence, he invok .....

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0 - 1,185.00 06-08-2004 573 1,265.00 67 5 1,537.00 - 3,447.00 19-08-2004 978 2,705.00 137 5 1,538.00 - 5,363.00 20-08-2004 388 806 41 5 2,030.00 - 3,270.00 20-08-2004 1,285.00 3,300.00 165 5 30 - 4,785.00 01-10-2004 812 2,640.00 133 5 2,823.00 - 6,413.00 10-11-2004 523 1,518.00 74 5 30 - 2,150.00 02-12-2004 1,078.00 2,200.00 112 5 30 - 3,425.00 25-12-2004 1,111.00 2,846.00 143 5 3,030.00 - 7,135.00 02-02-2005 843 2,200.00 112 5 30 25 3,215.00 15-02-2005 599 1,595.00 83 5 30 18 2,330.00 24-02-200 .....

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f rent and removal documentation fee and document processing fee. Ld. Counsel for the assessee stated that this can be verified from copies of bills of freight charges and copies of bills of clearing service charges. Ld. Counsel for the assessee stated that reimbursement expenses and custom duty payments by agent for and on behalf of the assessee cannot be covered under the TDS provisions. Hence, these expenses are not liable to TDS and the provisions of section 40(a)(ia) of the Act and not appl .....

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essee. These reimbursement expenses were not made towards any services rendered by the agent, but have been made to set off of the expenses incurred by the agent while clearing the imported goods from the customs for/on behalf of the assessee. Since no element of income is embedded in reimbursement of expenses incurred by agency for/on behalf of the assessee, the assessee was not obliged to deduct tax at source, and, therefore, the CIT(A) has rightly deleted the addition. He also relied on in th .....

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ht incurred on its behalf under an agreement for which separate bill is raised, and to such payments the provision of section 194 of the I. T. Act is not attracted. The above issue has been considered by the ITAT Delhi Bench in the case of Willmar Schwabe India (P) Ltd. (supra), wherein it has been held that if there is reimbursement of expenses on account of bills raised, no TDS is to be deducted therefrom. Section 194C of the Act is applicable, where payments is made to a contractor/sub-contra .....

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lso relied on the decision of ITAT, Mumbai F Bench in the case of M/s. Utility Powertech Ltd. Vs. ACIT, ITA No.2561/Mum/2009, A.Y. 2005-06 dated 19.04.2010, wherein the Tribunal vide para 5 has held as under: 5) We have considered the rival contentions and perused the record. The jurisdictional High Court in the case of CIT Vs. Seimens Aktiongesellschaft (supra) has held that reimbursement of expenses cannot be regarded as revenue in the hands of the payee. While deciding the issue, the Hon ble .....

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