Case Law Details
ACIT Vs Veera Associates (ITAT Visakhapatnam)
In the instant case, the expenditure debited to P&L account towards the conversion expenses is reimbursement of expenditure, which is supported by the agreement entered into by the assessee. The A.O. made addition u/s 40(a)(ia) of the Act but not given any reasoning. The Ld. CIT(A) held that the same is reimbursement of expenses. M/s. Aditya Spinners Limited has admitted the entire amount of reimbursement of expenses as well as conversion charges as income in their hands and filed the return of income for the relevant assessment year. As held by the coordinate bench of Hyderabad in the case of M/s. Louis Berger International Inc. (supra) since no element of profit is involved, the reimbursement of expenditure does not form part of total income. Therefore we are of the considered view that the conversion expenses of Rs.4,36,13,708 was the reimbursement of expenditure and does not attract the TDS and consequent disallowance u/s 40a(ia).
FULL TEXT OF THE ITAT JUDGMENT
PER D.S. SUNDER SINGH, Accountant Member:
This appeal filed by the revenue is directed against order of the Commissioner of Income Tax (Appeals), {CIT(A)}, Guntur vide ITA No.93/CIT(A)-1/GNT/2014-15 dated 29.3.2016 for the assessment year 2007-08.
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