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Commissioner of Income Tax-17 Versus Altaf I. Motorwala

2016 (10) TMI 250 - BOMBAY HIGH COURT

TDS u/s 194C - tds liability on reimbursement expenditure - Held that:- A bare reading of Section 194C of the Act would indicate that it does not cover reimbursement of expenditure incurred separately not as a part of the consideration for the work done by the agent / contractor. Further the view taken by the CIT(A) as well as by the impugned order of the Tribunal on facts that the payments made to the agent for the freight paid by it on the respondent assessee's behalf was in fact, reimbursemen .....

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respondent ORDER P. C. 1. This Appeal under Section 260A of the Income Tax Act, 1961 (the Act) challenges the order dated 26th August, 2013 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respect of Assessment Year 200910. 2. Mr. Kotangle, learned Counsel for the Revenue urges the following reframed questions of law for our consideration : Whether on the facts and circumstances of the case and in law, the Tribunal was justified in holding that the reimburseme .....

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ow cause why the expenditure should not be disallowed. The respondent assessee reported that no tax on the amount of ₹ 61.72 lakhs being freight charges was deducted as it was only a reimbursement to its agent of the amount paid on freight. This, was evidenced by two separate bills being raised by the agent, one for reimbursement and other for services rendered. This was not accepted by the Assessing Officer and he disallowed the entire expenditure of ₹ 63.48 lakhs and added it to th .....

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assessee to its agent. The service charges of the agent for clearing and forwarding were separately billed and paid for by the respondent assessee. The CIT(A) also held that the amount of ₹ 61.72 lakhs was paid on account of reimbursement and would not be hit by CBDT Circular No. 715 dated 8th August, 1995 as the payment is supported by separate invoice from the Airlines in its name. This was so as the Circular contemplated cases where there was one gross amount charged by the person rende .....

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