sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Latest Expert Exchange
From the Courts »
 Commissioner Of Income Tax (Exemptions) vs Bharati Vidyapeeth Chairman
 Chief Revenue Controlling Officer Cum Inspector General Of Registration, & Ors. vs P. Babu
 Commissioner Of Income Tax (Tds) vs M/s Tata Teleservices Limited Managing Director
 Commissioner Of Income Tax (Tds) vs M/s Jai Prakash Associates Ltd.
 In The State Of Tamil Nadu vs Union Of India & Ors.
 Lakhan Lal & Anr. vs General Manager (R And R) Narmada Hydrorelectric Development Corporation & Ors.
 Commissioner, Customs And Service Tax (Cgst) vs M/s Shri Nakoda Ispat Ltd. Through Its Authorized Person
 Commissioner Of Cgst And Central Excise vs Metro Security Services Thr. Its Director
 Commissioner Of Cgst And Central Excise vs Metro Security Services Thr. Its Director
 India’s new proposal for transfer pricing secondary adjustments is welcome relief
 M/s. Ambience Constructions India Ltd vs Commissioner Of Customs And Central Excise, Hyderabad

ACIT vs. St. Marys Rubbers Private Ltd (ITAT Cochin)
August, 08th 2017

S. 40(a)(ia): Amounts paid by way of reimbursement of expenses do not constitute income in the hands of the recipient. Consequently, the payer is under no obligation to deduct TDS u/s 194C and no disallowance of the expenditure can be made u/s 40(a)(ia). CBDT Circular No.715 dated 08.08.1995 distinguished

(i) Mark Logistics has also given details of bills, copies of which are placed in paperbook pgs. 23 to 32 and these also clearly show that they were claiming reimbursement of expenditure incurred by them on behalf of the assessee. In the case of ITO vs. Deepak Bhargava ITA No. 343/Del/2012 dated 13th November 2014, where also the question was disallowance u/s. 40(a)(ia) of the Act for non deduction of tax at source on payments effected to clearing and forwarding agents, what was held by the Tribunal is reproduced hereunder:

“6.1 The CIT(A) has categorically held that the amount of Rs. 18,16,637/- is nothing but reimbursement of expenses incurred by the payee on behalf of the assessee. Copies of the few bills raised by the two agencies were placed on record at Pages 40 to 66 of the assessee’s paper book., On perusal of the same, it is dearly evident that these are nothing, but reimbursement of expenses incurred by the clearing agencies on behalf of the assessee. Therefore, these amounts did not constitute income of the clearing agent and no TDS was required to made thereon. Therefore, the provision of Section 194C will not be applicable in respect of reimbursement of expenses.”

(ii) The Tribunal, while giving the above decision, had also considered the effect of CBDT Circular No.715 dated 08.08.1995 and also ruled that the said Circular was applicable only where consolidated bills were raised inclusive of contractual payments and re-imbursement of actual expenditure. Same view was taken by the Bangalore Bench of this Tribunal in the case of DCIT vs. Dhanyaa Seeds (P) Ltd. (supra). Hon’ble Gujarat High Court in the case of Pr. CIT vs. Consumer Marketing (India) (P.) Ltd.(supra) held that when separate bills are there for reimbursement of expenditure received by C&F agent, TDS was not required to be made on reimbursement. It is an admitted position in the case before us that assessee had in addition to reimbursement of expenses, separately paid brokerage and commission Rs.2,52,410/- which was subjected to disallowance in the original assessment.

(iii) Considering all these, we are of the opinion that the CIT(A) was justified in deleting the disallowance made u/s. 40(a)(ia) of the Act.


Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Quality Assurance Services Testing and Re-testing

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions