ITO, WD-1(2), KOLKATA, Burdwan V. M/s Cemco Marketing, Burdwan

ITA 1095/KOL/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6694 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 19-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure
• Section: 69C; 40(a)(ia); 194C

Judgement Text

1 ITA NO.1095/KOL/2016 CEMCO MARKETING , AY- 2011-12 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 1095/KOL/2016 ASSESSMENT YEAR: 2011-12 INCOME-TAX OFFICER, WD. 1(2), BURDWAN VS. M/S. CEMCO MARKETING (PAN: AADFC0235E) APPLICANT RESPONDENT DATE OF HEARING 07.01.2019 DATE OF PRONOUNCEMENT 23.01.2019 FOR THE APPLICANT SHRI C. J. SINGH, ADDL. CIT, SR. DR FOR THE RESPONDENT SHRI BISWESWAR GHOSH, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. CIT(A), BURDWAN DATED 09.02.2016 FOR AY 2011-12. 2. GROUND NOS. 1 AND 2 OF REVENUES APPEAL IS AGAIN ST THE ORDER OF LD. CIT(A) IN DELETING THE DISALLOWANCE OF RS.1,63,09,574/- MADE U/S. 40(A)(IA) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) REPRESE NTING SECONDARY FREIGHT CHARGES EXPENSES WHICH WAS INCURRED ON TRANSPORTATION OF CE MENT TO THE DEALERS PREMISES AS PER AGREEMENT BETWEEN ASSESSEE , C&F AGENT AND PRINCIPA L CEMENT COMPANIES AND ALSO AGAINST THE ACTION OF LD. CIT(A) IN HOLDING THAT THE ASSES SEE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE U/S. 194C OF THE ACT BY OBSERVING THAT THE P AYMENTS WERE NOT MADE TO ANY CONTRACTOR OR SUB-CONTRACTOR. 3. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS C & F AGENT OF M/S. ULTRATECH CEMENT LTD., WHICH IS A CEMENT MANUFACTURER. DURING THE A SSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE CLAIMED SECONDARY FREIGH T CHARGES IN THE P&L ACCOUNT AMOUNTING TO RS.1,63,09,574/- AND AT THE TIME OF AS SESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO PROVIDE AN EXPLANATION AS TO WHY HIS CLAIM OF EXPENDITURE SHOULD NOT BE 2 ITA NO.1095/KOL/2016 CEMCO MARKETING , AY- 2011-12 DISALLOWED U/S 40(A)(IA) OF THE ACT FOR NOT COMPLYI NG WITH THE PROVISIONS OF SECTION 194C OF THE ACT. TO THIS QUERY/EXPLANATION SOUGHT, THE ASSE SSEE RESPONDED THAT THE SAID EXPENDITURE WAS RE-IMBURSEMENT EXPENDITURE AND THE PAYMENTS WER E NOT MADE TO ANY CONTRACTOR OR SUB CONTRACTOR AND THAT THE EXPENSES WERE NOT IN PURSUA NCE OF THE ASSESSEES BUSINESS BUT THAT THE ASSESSEE ONLY ACTED AS A C&F AGENT AND FACILITA TED SUCH PAYMENTS ON BEHALF OF THE CEMENT COMPANY. THE AO DID NOT AGREE AND WAS OF THE OPINION THAT SECTION 194C SPOKE OF TAX DEDUCTION BY THE PERSON MAKING PAYMENT AND WHEN THE PAYMENTS WERE MADE UNDER SOME CONTRACT AND SO DISALLOWED THE SAME AND WAS AD DED TO THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO ALLOWED THE ASSESSEES GROUND OF APPEAL BY OBSERVING AS UNDER: I HAVE CAREFULLY CONSIDERED THE ENTIRE MATERIAL ON RECORD. THE IDENTICAL ISSUE IN RELATION TO SECONDARY FREIGHT CHARGES HAS BEEN ADJUDICATED U PON BY ME FOR THE SAME APPELLANT FOR THE AY 2010-11 IN MY ORDER UPON APPEAL NO. 145/CIT( A)/ASL/WD-1(2)/BWN/13-14 IN WHICH I HAVE ALLOWED THE APPEAL OF THE APPELLANT AF TER EXAMINATION OF ALL THE FACTS, THE REMAND REPORT, ITS REJOINDER, THE VARIOUS CASE LAWS RELIED UPON BY THE APPELLANT AS WELL AS THE HON'BLE ITAT'S ORDER AND THAT OF THE LD CIT(A) XXXI, KOLKATA IN THE APPELLANT'S OWN CASE. SINCE THE ISSUES WITH RESPECT TO THIS GROUND ARE IDENTICAL, THIS GROUND IS BEING ALLOWED FOR THE SAME REASONS CITED IN MY AFOREMENTI ONED ORDER. THIS GROUND OF THE APPELLANT IS THEREFORE ALLOWED. AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND CAREFULLY GO NE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. FACTS ARE NOT REITERATED FOR THE SAKE OF BREVITY. WE NOTE THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THIS T RIBUNAL IN FAVOUR OF THE ASSESSEE IN ASSESSEES OWN CASE FOR AY 2010-11 AND 2012-13 IN I TA NOS. 1056 & 1418/KOL/2016 DATED 13.06.2018 WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 4. NEXT COMES THE REVENUES LATTER SUBSTANTIVE GR OUND THAT CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELETING SECONDARY FREIGHT CHARGES D ISALLOWANCE OF 95,05,125/- WITH THE FOLLOWING DISCUSSION: THE FACTS FOR THE SAKE OF GRO UND -WISE COMPLETION ARE BEING BRIEFLY STATED AGAIN: 1. THE APPELLANT IS A C&F AGENT OF THE AGENT OF ULTRAT ECH CEMENT LTD WHO IS MANUFACTURER OF CEMENT. THE ASSESSEE HANDLES THE CE MENT FROM THE RAILWAY RAKE POINT TILL IT REACHES THE DEALER'S GODOWN. SO THE A SSESSEE UNLOADS THE CEMENT FROM THE RAILWAY SIDING AND FORWARD THE SAME BY TRU CK TO THE GODOWN AND THE EXPENSE INCURRED FOR THIS ACTIVITY IS CALLED THE PR IMARY TRANSPORTATION AND/ OR FREIGHT AND SUCH AMOUNT IS REIMBURSED BY THE PRINCI PAL COMPANY. THEN THE ASSESSEE ARRANGES DELIVERY OF THE CEMENT BAGS FROM THE GODOWN TO THE VARIOUS DEALERS POINT BY TRUCK AND THE EXPENSE INCURRED FOR IT IS CALLED THE SECONDARY 3 ITA NO.1095/KOL/2016 CEMCO MARKETING , AY- 2011-12 FREIGHT CHARGES AND THIS AMOUNT IS REIMBURSED BY TH E COMPANY AS WELL AND ALL SUCH REIMBURSEMENTS ARE MADE IN ACTUAL BASIS AS PER THE PREFIXED RATES. IN THE CASE OF SECONDARY FREIGHT CHARGES, THE DEALERS PAY TO THE TRUCK DRIVERS AND THEN RAISE THE BILL AND THE ASSESSEE REIMBURSES SUCH MON EY TO THE DEALERS ON ACTUAL BASIS ON BEHALF OF THE COMPANY AS THE PRINCIPAL COM PANY PAYS SUCH REIMBURSEMENT AND THE JOB OF THE ASSESSEE IS ONLY T O FACILITATE SUCH PAYMENT. DURING THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE APPELLANT CLAIMED SECONDARY FREIGHT CHARGES IN THE PROFIT A LOSS ACCO UNT AMOUNTING TO 95,05,125.00 AND DURING THE HEARING STAGE THE ASSES SEE WAS ASKED TO PROVIDE EXPLANATION AS TO WHY THE CLAIM OF EXPENDITURE SHOU LD NOT BE DISALLOWED TO WHICH THE ASSESSEE RESPONDED VIDE LETTER DATED 11/0 3/2013 CONTENDING THAT THE SAID EXPENDITURE IS REIMBURSEMENT EXPENDITURE AND T HE PAYMENTS WERE NOT MADE TO ANY CONTRACTOR OR SUB CONTRACTOR AND THE EXPENSE S ARE NOT IN PURSUANCE OF THE ASSESSEE'S BUSINESS BUT THE ASSESSEE ONLY ACTS AS A C&F AGENT AND FACILITATED SUCH PAYMENTS ON BEHALF OF THE COMPANY. THE AO CONT ENDED THAT SECTION 194C SPEAK OF TAX DEDUCTION BY THE PERSON MAKING PAYMENT AND ALSO THE PAYMENTS WERE MADE UNDER SOME CONTRACT AND ADDED THEM TO THE TOTAL INCOME OF THE ASSESSEE. BEFORE ME THE APPELLANT HAS SUBMITTED THAT THE AO F AILED TO CONSIDER THE FACTS OF THE CASE. HE STATED THAT THE DEDUCTION OF TAX AT SOURCE U/S 194C ON SECONDARY FREIGHT CHARGES IS NOT NECESSARY. THIS IS BECAUSE S UCH SECONDARY FREIGHT CHARGES PAID TO THE TUNE OF RS. 95,05,125.001 - ARE REIMBURSEMENT OF EXPENSES AND IT IS NOT ANY EXPENSES OF THE ASSESSEE BUT IT IS THE EXPENSES OF THE COMPANY FOR WHICH THE ASSESSEE FIRM ACTS AS A C &F AGENT. THAT THE ASSESSEE IS A C&F AGENT OF ULTRATECH CEMENT LTD WHO IS MANUFACTURER OF CEMENT. THE ASSESSEE HANDLES THE CEMENT FROM THE RA ILWAY RAKE POINT TILL IT REACHES THE DEALER'S GODOWN. THE ASSESSEE ARRANGES DELIVERY OF THE CEMENT BAGS FROM THE GODOWN TO THE VARIOUS DEALERS POINT B Y TRUCK AND THE EXPENSE INCURRED FOR IT IS CALLED THE SECONDARY FREIGHT AND THIS AMOUNT IS REIMBURSED BY THE COMPANY AS WELL AND ALL SUCH REIM BURSEMENTS ARE MADE IN ACTUAL BASIS AS PER THE PREFIXED RATES. IN THE C ASE OF SECONDARY FREIGHT CHARGES, THE DEALERS PAY TO THE TRUCK DRIVERS AND T HEN RAISE THE BILL AND THE ASSESSEE REIMBURSES SUCH MONEY TO THE DEALERS ON AC TUAL BASIS ON BEHALF OF THE COMPANY AS THE PRINCIPAL COMPANY PAYS SUCH REIM BURSEMENT AND THE JOB OF THE ASSESSEE IS ONLY TO FACILITATE SUCH PAYMENT. THE ASSESSEE ALSO PLACED RELIANCE ON THE RATIO OF T HE ASSESSEE'S OWN CASE BEFORE THE CIT(APPEALS) - XXXII, KOLKATA AND ITAT, KOLKATA C BENCH FOR THE A/Y 2008-09, WHERE THE ASSESSEE GOT RELIEF BASE D ON THE FACTS THAT LIABILITY TO DEDUCT TAX AT SOURCE U/S 194C WOULD ON LY ARISE WHEN THE PAYMENT IS MADE UNDER A CONTRACT, WHICH IS NOT TRUE IN THIS INSTANT CASE AS THERE IS NO FINDING BY THE AO THAT THE IMPUGNED PAY MENTS WERE MADE TO A CONTRACTOR OR SUB-CONTRACTOR UNDER SOME CONTRACT. R ATHER THE FACTS OF THE CASE SUGGEST THAT THE IMPUGNED PAYMENTS ARE MADE TO THE DEALERS OF THE COMPANY AND NOT TO ANY TRANSPORTERS. THERE IS NOTHING ON RECORD TO SUGGEST THE EXISTENCE OF ANY CONTRACT BETWEEN THE ASSESSEE AND THE RECIPIENT OF THE IMPUGNED PAYM ENT AND SUCH IS DENIED BY THE ASSESSEE AS WELL. 4 ITA NO.1095/KOL/2016 CEMCO MARKETING , AY- 2011-12 I HAVE CAREFULLY EXAMINED THE ISSUES AT HAND AS WEL L ALL THE RELEVANT MATERIAL AS LISTED ABOVE. THE ISSUE HAS BEEN DISCUSSED AT LENGT H IN THE PRECEDING PARAGRAPHS. THE FACT IS THAT IT HAS BEEN ESTABLISHED THAT THE A PPELLANT WAS UNDER CONTRACTUAL OBLIGATION WITH THE PRINCIPAL COMPANY TO ENSURE THE HANDLING AND DELIVERY OF CEMENT TO THE DEALERS AND THE PRINCIPALS WOULD REIMBURSE T HE ENTIRE EXPENSES ON ACTUAL TERMS TO THE C&F AGENT - THE APPELLANT. THE SECONDA RY FREIGHT AND TRANSPORT CHARGES WHICH WERE INCURRED WERE SIMILARLY REIMBURSED BY TH E PRINCIPALS ON ACTUALS. IN FACT THESE FIGURES HAVE APPEARED IN THE P&L ACCOUNT OF T HE APPELLANT AND NOT CONTESTED BY THE AO. THE PAYMENTS HAVE BEEN REIMBURSED BY THE PRINCIPALS AS IS EVIDENT FROM THE PROFIT & LOSS ACCOUNT FOR THE YEAR UNDER CONSID ERATION, WHERE THE APPELLANT HAS PAID RS.95,0:5.125.74 WHEREAS IT HAS RECEIVED RS. 9 5,04,703.55. THE FACT THAT AT FIRST THE DEALERS PAID FOR THE FREIGHT AND HAD IT REIMBUR SED BY THE APPELLANT IN TURN TO BE REIMBURSED BY THE PRINCIPALS MAKES NO DIFFERENCE TO THE FACT THAT ULTIMATELY THE REIMBURSEMENT CAME FROM THE PRINCIPALS AND THE PROP OSITION THAT IF THE APPELLANT HAD BEEN MAKING PAYMENTS ON BEHALF OF THE PRINCIPAL S - AS IT HAS BEEN ESTABLISHED THEY WERE - THEN THERE WAS NO OBLIGATION ON THE APP ELLANT TO DEDUCT TAX AT SOURCE. IN VIEW OF THE DISCUSSIONS ABOVE, THE SAID DISALLOWANC E IS THEREFORE NOT UPHELD. WE NOTICE HEREIN AS WELL THAT THE AMOUNT IN QUESTI ON IS A REIMBURSEMENT ON PRINCIPAL TO PRINCIPAL BASIS AS PER ASSESSEES PROFIT AND LOSS A CCOUNT. THE SAME HAS ALSO GONE UNREBUTTED FROM REVENUES SIDE DURING THE COURSE OF HEARING WH EREIN IT HAS FAILED TO DISPUTE THAT ASSESSEE HAD FIRST PAID THE DEALERS CONCERNED FOLLO WED BY ITS REIMBURSEMENT FROM THE CONCERNED PRINCIPAL. WE THUS DECLINE REVENUES INST ANT SUBSTANTIVE GROUND AS WELL AS ITS FORMER APPEAL ITA NO.1056/KOL/2016. 5. THESE LEAVES US WITH THE REVENUES LATTER APPEAL ITA 1418/KOL/2016 FOR ASSESSMENT YEAR 2012-13 RAISING SOLE SUBSTANTIVE ISSUE OF SECTION 4 0(A)(IA) DISALLOWANCE 1,47,59,499/- PERTAINING TO SECONDARY FREIGHT CHARGES. BOTH LEARN ED REPRESENTATIVES ARE VERY FAIR IN INFORMING US THE ISSUE IS COVERED BY OUR DISCUSSION IN PRECEDING ASSESSMENT YEAR UPHOLDING THE CIT(A) SIMILAR FINDINGS. WE THUS REJECT REVENUE S INSTANT LATTER APPEAL AS WELL. 5. SINCE LD. DR COULD NOT POINT OUT ANY CHANGE IN F ACTS OR LAW, SO THE AFORESAID FINDING OF THE TRIBUNAL COULD NOT BE CONTROVERTED BY THE DE PARTMENT, AND SO THE ISSUE IS SQUARELY COVERED BY THE DECISION CITED SUPRA AND THE LD. CIT (A) HAS ALLOWED THE ASSESSEES GROUND OF APPEAL BY FOLLOWING THE ORDER OF THE TRIBUNAL. SO, WE DO NOT FIND ANY INFIRMITY IN HIS ORDER IN ALLOWING THE ASSESSEES GROUND OF APPEAL AND WE UPHOLD THE SAME. THEREFORE, THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 6. GROUND NO. 3 OF REVENUES APPEAL IS AGAINST THE ACTION OF LD. CIT(A) IN DELETING THE ADDITION OF RS.26,79,579 U/S. 69C OF THE ACT ON ACC OUNT OF SECONDARY FREIGHT CHARGES EXPENDITURE. 7. BRIEF FACTS ARE THAT THE AO FOUND THAT THE ASSE SSEE HAD INCURRED A TOTAL EXPENDITURE TO THE TUNE OF RS.1,89,89,153/- BUT ONLY DEBITED RS.1, 63,09,574/- IN THE P&L ACCOUNT. ACCORDINGLY, ASSESSEE WAS ASKED TO EXPLAIN THE DIS CREPANCY IN FIGURES OF SECOND FREIGHT 5 ITA NO.1095/KOL/2016 CEMCO MARKETING , AY- 2011-12 CHARGES AND ALSO TO EXPLAIN AS TO WHY THE DIFFERENC E SHOULD NOT BE TREATED AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. IN RESPONSE THE ASS ESSEE FURNISHED EXPLANATION VIDE LETTER DATED 21.03.2014 WHICH IS REPRODUCED HEREINBELOW: PLEASE NOTE THAT THE ASSESSEE FIRM HAS QUOTED THE FIGURE OF RS.1,63,09,574/- WHILE AS PER THE REGISTER YOUR GOODSELF HAVE DISCOVERED RS.1,89,89,1 53/-. NOW THIS FIGURE IS RELATED TO SECONDARY FREIGHT CHARGES AND THE ASSESSEE DISBURS ES THE MONEY ONLY WHEN THEY GET REIMBURSED. SO THE DIFFERENCE AMOUNT OF RS.26,79,5 79/- HAS BEEN PAID IN THE NEXT YEAR AND THAT IS WHY NOT TAKEN INTO ACCOUNT IN THE PROFIT & LOSS A/C FOR THE RELEVANT YEAR. MOREOVER THIS AMOUNT IS ACTUALLY THE EXPENSE OF THE COMPANY AND NOT OF THE ASSESSEE, HENCE IT IS NOT DIRECTLY RELATED TO THE ACTIVITIES OF THE COMPANY. HENCE SECTION 194C OF THE INCOME TAX ACT, 1961 CAN ONLY BE INVOKED TO THOSE WHERE THE EXPENDI TURE IS RELATED DIRECTLY TO THE ACTIVITIES OF THE BUSINESS, WHICH IS NOT THE CASE HERE. 8. THEREAFTER, THE AO DID NOT AGREE WITH THE EXPLA NATION GIVEN BY THE ASSESSEE AND WHILE DISALLOWING THE AMOUNT OBSERVED AS UNDER: SUBMISSIONS OF THE ASSESSEE HAVE CAREFULLY BEEN C ONSIDERED. THE ASSESSEE IS C&F AGENT OF THE PRINCIPAL M/S ULTRATECH CEMENT LTD. AND M/S. GR ASIM INDS. LTD. THE ASSESSEE FOLLOWS MERCANTILE SYSTEM OF ACCOUNTING. THE RECEIPTS FROM THE PRINCIPAL ARE CREDITED TO THE P&L ACCOUNT. SIMILARLY, EXPENSES ARE DEBITED TO THE P&L ACCOUNT. ALTHOUGH THE EXPENDITURE PERTAINS TO THE PRINCIPAL COMPANY, BUT IT HAS BEEN TAKEN INTO ACCOUNT BY THE ASSESSEE. THE ASSESSEE HAS MADE PAYMENT TO THE VARIOUS PARTIES AN D SUBSEQUENTLY CLAIMED RE-IMBURSEMENT OF EXPENSES. TOTAL EXPENDITURE INCURRED DURING THE YEAR IS RS. 1,89, 89,153/- AS REFLECTED IN THE REGISTER FURNISHED BY THE ASSESSEE, BEING PART OF A SSESSEE'S BOOKS OF ACCOUNTS. THE ASSESSEE HAS DEBITED THE P&L ACCOUNT BY RS.L,63,09,574/- ONL Y. THIS MEANS THAT THE EXCESS OF EXPENDITURE HAS ACTUALLY BEEN INCURRED BUT NOT REFL ECTED IN THE P&L ACCOUNT. THIS ALSO MEANS THAT THE EXCESS EXPENDITURE HAS BEEN INCURRED OUT O F BOOKS FROM UNEXPLAINED SOURCES. THE ASSESSEE HAS NOT BEEN ABLE TO EXPLAIN THE DISCREPAN CY. THEREFORE, THE SUM OF RS.26,79,579/- IS TREATED AS UNEXPLAINED EXPENDITURE UNDER THE PROVIS IONS OF SECTION 69C OF THE ACT AND ADDED TO THE TOTAL INCOME . 9. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A), WHO DELETED THE ADDITION BY OBSERVING AS UNDER: I HAVE EXAMINED THE ISSUE IN ITS ENTIRETY AND PER USED THE SUBMISSIONS OF THE APPELLANT. IT HAS ALREADY BEEN ESTABLISHED THAT THE APPELLANT HAD AN ARRANGEMENT WITH THE PRINCIPALS THAT THE EXPENDITURES ON SECONDARY FREIGHT WOULD BE REIMBURS ED ON ACTUALS. IT IS NOT DENIED THAT THIS EXPENDITURE IS OF THE SAID NATURE COVERED BY THE AG REEMENT BETWEEN THE PRINCIPALS AND THE APPELLANT. IN THESE CIRCUMSTANCES, THEN THE ONLY WA Y THAT SUCH EXPENDITURE COULD STILL BE TREATED AS EXPENDITURE COVERED BY SECTION69C IS IF THE APPELLANT HAD MADE ACTUAL PAYMENTS TO THE PARTIES FROM UNDISCLOSED SOURCES AND NOT RECEIV ED THE REIMBURSEMENTS BY THEN. BUT THE AO HAS NOT CONTESTED THE APPELLANT'S PLEA THAT HE DID NOT MAKE ACTUAL PAYMENTS TO THE PARTIES UNTIL HE HAD RECEIVED THE REIMBURSEMENTS FROM THE PRINCIP ALS. NOW, IF THIS FACT IS UNCONTESTED, THEN IT BECOMES DIFFICULT TO SEE HOW THERE CAN BE ANY AP PLICABILITY OF SECTION 69C OF THE ACT, SINCE NO EXPENDITURE HAS ACTUALLY BEEN INCURRED AD WHATEV ER HAS BEEN INCURRED ON ACCRUAL BASIS HAS BEEN INCURRED ON BEHALF OF THE PRINCIPALS, AND SUITABLE REIMBURSEMENTS ARE MADE BY THE PRINCIPALS. IN VIEW OF THE ABOVE, I CANNOT FIND MER IT IN THE AOS FINDINGS AND THE ADDITION IS THEREFORE DELETED. 6 ITA NO.1095/KOL/2016 CEMCO MARKETING , AY- 2011-12 AGGRIEVED, REVENUE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT ASSESSEE WHICH IS THE C&F AGENT OF ULTRATECH CEMENT, REIMBURSES THE DEALERS OF CEMENT, WHO PAYS TO THE TRUCK DRIVERS TH E TRANSPORTATION EXPENSES FROM THE GODOWN TO THEIR DESTINATION. SINCE THE ASSESSEE RE IMBURSES THIS PAYMENT TO DEALERS AFTER RECEIVING IT FROM THE PRINCIPAL (ULTRATECH CEMENT) AND SINCE THE ASSESSEE HAS NOT PAID THE AMOUNT OF RS.26,79,579/- TO THE DEALERS, QUESTION O F MAKING ADDITION U/S. 69C DOES NOT ARISE. SO, WE DO NOT FIND ANY INFIRMITY IN THE ORD ER PASSED BY THE LD. CIT(A) AND, THEREFORE, THE SAME IS HEREBY UPHELD. THIS GROUND OF APPEAL OF REVENUE IS DISMISSED. 9. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER IS PRONOUNCED IN THE OPEN COURT ON 23RD JANU ARY, 2018. SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 23RD JANUARY, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-1(2), BURDWAN 2 RESPONDENT M/S. CEMCO MARKETING, VHANGA KUTHI, G. T. ROAD, BURDWAN-713101. 3. 4. CIT(A), BURDWAN (SENT THROUGH E-MAIL) CIT- , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR