BHAVIK RAJESH KHANDHAR SHARE & STOCK BROKERS P. LTD.,MUMBAI vs. DCIT RG 4(1), MUMBAI

During the hearing, the ld. counsel for the assessee Shri Dilip Lakhani contended that the assessee made the payments to M/s. Rajesh Enterprises, being the reimbursement of expenditure incurred by M/s. Rajesh Enterprises on behalf of the assessee and there was no obligation upon the assessee to deduct tax at source on reimbursement of expenditure. It was pleaded that M/s.Rajesh Enterprises actually recovered the expenses from the assessee. My attention was invited to page No. 38 of the paper book containing a debit note of Rs.2,28,000/-, which has been included in the balance sheet 31/03/2011 (page No. 36 of the paper book) in its income and expenditure account. My attention was further invited to page No. 30 of the paper book, letter dated 21/10/2013 containing the details of expenses amounting to Rs.2,28,000/- addressed to the DCIT by the assessee. It was further contended that the payee to whom the payment was made he offered income and paid taxes. This claim of the assessee was not controverted by the Revenue, but it was added that the appeal may be 3 Bhavik Rajesh Khandhar Share & Stock Brokers P. Ltd. sent to the file of the ld. Assessing Officer to examine the claim of the assessee. Considering the totality of facts and since the addition has been made of Rs. 2,45,340/- on which no TDS was deducted and the provision of section 40(a)(ia) was invoked, whereas in the debit note the income has been mentioned at Rs. 2,28,000/-, therefore, in fitness of things I am of the view that it needs examination at the level of the ld. Assessing Officer. The assessee be given opportunity to substantiate his claim. Thus, the appeal of the assessee is allowed for statistical purposes.

This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 13/02/2018.