The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT), while granting an interim relief to the assessee, Bajaj Foods Ltd, directed the income tax department to reconsider the TDS default issue relating to the payments made to foreign shipping companies on the basis of the documents.
The assessee contended that all these payments were by way of reimbursements of expenses incurred by the agents on behalf of the assessee and were not in the nature of income of the agents and therefore no tax was liable to be deducted on the same by the assessee. It was further contended that even otherwise the payment for Ocean freight related to foreign shipping companies who were required to pay taxes as per the provisions of section 172 of the Act and no TDS was required to be deducted on such payments.
The department was of the view that since the invoices of the assessee had not been verified and examined by the revenue authorities and some of the sample invoices in the paper book reveal that the contention of the assessee were not entirely correct, since some invoices revealed payment made to the agents for freight paid to Indian shipping Companies, the contention of the assessee in this regard would fail.
After considering arguments from both the sides, Ms. Annapurna Gupta (Accountant Member) and Ms. Suchitra Kamble (Judicial Member) held that “Undeniably the disallowance of expenses u/s. 40(a)(ia) of the Act has been made for want of evidences without considering the contentions advanced by the assessee on merits,but ld. Counsel for the assesee has demonstrated that the evidences were filed to the lower authorities. The issue therefore needs to be adjudicated on merits. We therefore consider it fit to restore this issue back to the A.O. to adjudicate it afresh in accordance with law after considering and verifying the evidences filed by the assessee, and the contentions made by the assesseee. Needless to add due opportunity of hearing be granted to the assessee.”
Advocate Parimalsigh Parmar appeared for the appellants.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
