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n the instant case, the assessee has failure to deduct TDS on expenditure debited as export charges to the Profit & Loss account. Assessee contended that, clearing and forwarding charges consisting of payments towards customs duties, transport charges, postage expenses, commission to the C&F agent and the service tax.
Held that—the Ld.CIT(A) held that the payment was towards reimbursement of expenses but no finding was given by the AO in this regard and the Ld.CIT(A) did not afford any opportunity to the AO to verify the nature of expenses with the agreement and supporting bills of transportation or the tickets of Railway, Road Carriers etc., Hence in all fairness we consider it is just and fair to remit the matter back to the file of the AO to verify the nature of payment with the C&F agreement, relevant bills of authenticated transport operators and decide the issue afresh on merits after giving opportunity to the assessee. TDS on payment made to shipping agents—In case, the expenses were incurred for ocean freight, the assessee is entitled for deduction and no TDS is required to be made on the ocean freight since the ocean freight and the reimbursement of actual expenses does not include the profit element. - In addition the expenses claimed over and above the ocean freight must be established by the assessee that the same represent the reimbursement of expenses with relevant evidences. Therefore, in all fairness, we are of the view that the issue should be remitted back to the file of the AO to make detailed verification of the nature of expenses with relevant bills and supporting evidences and to decide the deductibility of TDS and consequent disallowance u/s 40(a)(ia). Accordingly, we direct the AO to examine the issues and redo the same after giving opportunity to the assessee. In the result appeal of the revenue is allowed for statistical purpose.

Shanti Prime Publication Pvt. Ltd.

Section 40, 194C of Income Tax Act, 1961—Failue to deduct TDS—In the instant case, the assessee has failure to deduct TDS on expenditure debited as export charges to the Profit & Loss account. Assessee contended that, clearing and forwarding charges consisting of payments towards customs duties, transport charges, postage expenses, commission to the C&F agent and the service tax.
Held that—the Ld.CIT(A) held that the payment was towards reimbursement of expenses but no finding was given by the AO in this regard and the Ld.CIT(A) did not afford any opportunity to the AO to verify the nature of expenses with the agreement and supporting bills of transportation or the tickets of Railway, Road Carriers etc., Hence in all fairness we consider it is just and fair to remit the matter back to the file of the AO to verify the nature of payment with the C&F agreement, relevant bills of authenticated transport operators and decide the issue afresh on merits after giving opportunity to the assessee.

TDS on payment made to shipping agents—In case, the expenses were incurred for ocean freight, the assessee is entitled for deduction and no TDS is required to be made on the ocean freight since the ocean freight and the reimbursement of actual expenses does not include the profit element. - In addition the expenses claimed over and above the ocean freight must be established by the assessee that the same represent the reimbursement of expenses with relevant evidences. Therefore, in all fairness, we are of the view that the issue should be remitted back to the file of the AO to make detailed verification of the nature of expenses with relevant bills and supporting evidences and to decide the deductibility of TDS and consequent disallowance u/s 40(a)(ia). Accordingly, we direct the AO to examine the issues and redo the same after giving opportunity to the assessee. In the result appeal of the revenue is allowed for statistical purpose. [ACIT, CIRCLE-1 (1) , GUNTUR VERSUS M/S BEST INDIA TOBACCO SUPPLIERS PVT. LTD. AND VICE-VERSA] [2018] [4] [ITCD Online] [15] [ITAT VISAKHAPATNAM]