ITO Vs Deepak Bhargawa (ITAT Delhi)
In this case the appellant is receiving the material on Freight Prepaid basis (C&F). The foreign shipping companies were charging only the incidental charges like Port charges, Container payment, Stationery charges, License fees, Stamp charges, Bank charges, De-stuffing charges etc. These bills also include part payment of import duty paid by the appellant. Since Import Duty & Port charges are payment to Govt, as per provisions of law T.D.S. is not deductable. Other expenses which were reimbursed are also not subjected to T.D.S. In view of the facts and circumstances of the case the disallowance made by the assessing officer of Rs.18, 16, 637 under section 40a(ia) is uncalled for and is therefore deleted.
Full Text of the ITAT Order is as follows:-
This appeal at the instance of the Department is directed against the Commissioner (Appeals) order dated 14-11-2011. The relevant assessment year is 2007-08.
2. Though five grounds are raised in this appeal, all the grounds, relates to the issue of disallowance of two payments of Rs.18,16,637 and Rs.9,00,300 by invoking the provision of Section 40(a)(ia) of the Income Tax Act.
3. Brief facts of the case are as follows.
The assessee an individual is engaged in the business of Import & Trading in Electrical goods for the year in dispute. The return of income was filed on 31-10-2007 declaring income of Rs.1,99,892. The assessment was taken up for scrutiny by issuance of notice under section 143(2) of the Act. The scrutiny assessment under section 143(3) of the Act was completed vide order dated 29-12-2009 by making the following two disallowances of expenditure by invoking provision of under section 40(a)(ia) of the Act.
