The Tax Publishers2013 TaxPub(DT) 2222 (Guj-HC) : (2013) 053 (I) ITCL 0416 : (2014) 361 ITR 0192 : (2013) 217 TAXMAN 0114

Income Tax Act, 1961

--Business disallowance under section 40(a)(ia)--Interest, Commission, etc., paid to resident without deduction of tax at source Reimbursement of expenses--Assessee claimed deduction towards reimbursement of CHA charges paid to C & F agent and reimbursement of expenses towards consignment agents. The aforesaid expenses were disallowed by the solely on the ground that the assessee had not deducted the TDS. Held: Was not justified. So far as the obligation to deduct tax at source from the payment of transport charges and other charges was concerned, the same was complied with by the agent, who had made payment on its behalf. More so, the circular relied upon by the revenue that it was the liability of the assessee as principal agent to deduct the TDS, would not be applicable and the said circular would be applicable for payment made to principal to principal.

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