TMI Blog2018 (11) TMI 699X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the information available before us, it is not clear that whose liability it was to defray all these expenditure. We fully agree with the orders of the law authorities that on these sums tax should have been deducted at source. But the crux of the issue is that we should have deducted tax at source on this payments. Even otherwise, according to the proviso to section 40 (a) (ia) if the recipient of the income has paid tax on these income then the disallowance cannot be made in the hands of the assessee. In view of above facts, we set aside the whole issue back to the file of the learned assessing officer with a direction to the assessee to furnish adequate details before the assessing officer that whose liability it was to incur all these expenditure, on which tax should have been deducted at source. The assessee may place on record the high seas purchase agreements entered into with the supplier - decided in favour of assessee for statistical purposes. - ITA No. 2369/Del/2015 - - - Dated:- 13-11-2018 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Shri Ankit Gupta, Adv For The Revenue : Shri N.K. Bansal, Sr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on/ disallowance on estimated basis, which is unjust, arbitrary, unlawful, highly excessive, based on surmises and conjectures and cannot be justified by any material on 8) The additions made and the observations made are unjust, unlawful and based on mere surmises and conjunctures. The additions made cannot be justified by any material on record. 9) That the explanation given evidence produced, material placed and available on record has not been properly considered and judicially interpreted and the same do not justify the additions/ allowances made. 10) That the impugned Assessment Order passed by the Assessing Officer and order passed by CIT(A) are against the principles of natural justice and the same has been passed without affording reasonable and adequate opportunity of being heard. 11) That the interest u/s 234A 234B has been wrongly and illegally charged as the appellant could not have foreseen the disallowances/additions made and could not have included the same in current income for payment of Advance tax. The interest charged under various sections is also wrongly worked out. 2. Ground number 1, 2, 7, 8, 9, 10, 11 and 12 are general in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e head loans and advances. On verification of the loan and advances it was open by the learned assessing officer that assessee has advance loan to two persons of ₹ 4 04250 /- each. It was of the also noted that assessee has made payment of ₹ 9 462255/as as interest to bank. The assessee did not give any explanation before the assessing officer and therefore the learned assessing officer disallowed a sum of ₹ 1 05106/ on account of interest-bearing funds diverted to the advances without any purpose. The assessee contested the above disallowance before the learned commissioner of income tax appeals. Before him it was contested that the advances was made to the about to parties for purchase of land situated district Muzaffarnagar and therefore no interest was received from these parties. Before the assessing officer as well as before the learned commissioner appeals the assessee did not furnish any details and evidence regarding advances made to the aforesaid parties for the purchase of the land and therefore the learned commissioner appeals also confirmed the disallowance. 6. Before us, the learned authorised representative contested that that above advances is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased imported scrap on high seas basis from M/s Utkal steel Ltd and M/s Royal Treximp private limited and all the expenses such as IHC charges and shipping line charges are borne by the above companies. It was stated that Assessee Company has not paid any clearing agent charges during the year. Assessee submitted the copies of the purchase bills from the above parties and the ledger account of those parties. However, the learned assessing officer rejected the contention of the assessee and stated that assessee has made payments to Indian resident companies and from the copy of the invoices produced and placed on record, it is evident that in those invoices it is clearly mentioned that payments have been made on account of haulage charges shipping line Charges and clearing agent charges. The assessee has also not furnished any certificate under section 197 of the income tax act. Therefore, the learned AO held that the payments have been made to the above said companies for various charges on which no tax has been deducted by the assessee. Therefore he disallowed ₹ 2208831/ . The assessee challenged addition before the learned Commissioner of Income Tax Appeals and reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borne by the seller there is no need of putting any debit not by those sellers on the assessee. He further referred to the various debit note issued by the seller in the name of the assessee stating the payment for shipping line charges and clearing agent charges. He therefore submitted that these documents clearly show that assessee is responsible for payment to the contractors for all these charges and therefore the assessee should have deducted tax at source. He vehemently relied upon the order of the learned assessing officer and the learned commissioner of income tax appeals stating that they have rightly dealt with the whole issue holding that assessee should have deducted the tax at source, assessee has failed to deduct the tax at source, and therefore there is a disallowance. 13. We have carefully considered the rival contentions and perused the orders of the lower authorities. On the appreciation of the evidence submitted before us it is apparent that assessee has purchased shredded steels scraps on high seas basis from two parties. Both the parties raised the bill of the goods separately on the assessee, which is placed in the paper book. The customs duty was paid by t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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