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Income Tax Appellate Tribunal, MUMBAI BENCH “H” MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the assessee. The relevant assessment year is 2006-07. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-12 [in short ‘CIT(A)’], Mumbai and arises out of the assessment completed u/s 143(3) of the Income Tax Act 1961, (the ‘Act’).
The grounds of appeal
read as under: i. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming the disallowance of Rs.4,60,676/- u/s 40(a)(ia) of the Income Tax Act, 1961. ii. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the expenses of Rs.3,33,539/- also are covered by section 40(a)(ia) even though it does not represent the commission expenses, since these expenses was a part of composite contract and, therefore, Tax at source was to be deducted and in the absence of non-deduction of tax provisions of Section 40(a)(ia) are applicable.”
3. Before us, the Ld. counsel of the assessee submits that after the order dated 25.10.2017 passed by the Assessing Officer (AO) u/s 143(3) r.w.s. 254, the dispute remains of disallowance u/s 40(a)(ia) of an amount of Rs.61,040/- comprising Bill number SJ/BL/354 dated 27.12.2005 of (i) terminal handling charges of Rs.39,720/- and (ii) transportation of two trucks from Wada amounting to Rs.21,320/-. The Ld. counsel submits that as the payee has paid tax on the above amounts, the disallowance by the AO is not called for. On the other hand, the Ld. DR supports the order passed by the AO.
4. We have heard the rival submissions and perused the relevant materials on record. Following the decision in the case of Hindustan Coca Cola Beverage (P.) Ltd. v. CIT [2007] 293 ITR 226/163 Taxman 355 (SC), who direct the AO to verify whether the payee has reflected the above amount in its return of income and paid tax thereon. If the answer is yes then no disallowance is called for. If the answer is no, then the AO would make the disallowance. We direct the assessee to file the relevant documents/evidence before the AO.