Gopakumaran Nair, CHENNAI V. ACIT, CHENNAI

CO 64/CHNY/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3539 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 16-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 01-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V ELANGOVAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.274/CHNY/2017 & C.O. NO.64/CHNY/2017 (IN I.T.A. NO.274/CHNY/2017) ' (' / ASSESSMENT YEAR : 2012-13 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE 7(1), CHENNAI - 600 034. V. SHRI GOPAKUMARAN NAIR, NO.5, GOLDEN AMITY, NO.F-86, ANNA NAGAR EAST, CHENNAI - 600 102. PAN : AAKPG 0451 D (*+/ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) *+ , - / APPELLANT BY : SHRI AR.V. SREENIVASAN, JCIT ./*+ , - / RESPONDENT BY : SHRI V. ELANGOVAN, CA 0 , 1$ / DATE OF HEARING : 05.02.2018 2!( , 1$ / DATE OF PRONOUNCEMENT : 16.02.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 7, CHENNAI, DATED 07.12.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-13. THE ASSE SSEE HAS FILED 2 I.T.A. NO.274/MDS/17 C.O. NO.64/MDS/17 CROSS-OBJECTION IN RESPECT OF THE SAME ORDER OF THE CIT(APPEALS). THEREFORE, WE HEARD BOTH THE APPEAL AND THE CROSS-O BJECTION TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. THERE WAS A DELAY OF 29 DAYS IN FILING THE CROSS -OBJECTION BY THE ASSESSEE. THE ASSESSEE HAS FILED A PETITION FOR CO NDONATION OF DELAY. WE HAVE HEARD THE LD. REPRESENTATIVE AND THE LD. D. R. WE FIND THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE CROSS -OBJECTION BEFORE THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY A ND ADMIT THE CROSS- OBJECTION. 3. SHRI AR.V. SREENIVASAN, THE LD. DEPARTMENTAL REP RESENTATIVE, SUBMITTED THAT THE ASSESSEE PAID A SUM OF 1,64,55,173/- TO SHRI GUIRAL PHILIPPE, AN AGENT OUTSIDE THE COUNTRY IN FRANCE, T OWARDS COMMISSION. THE ASSESSEE HAS TO DEDUCT TAX AS REQUIRED UNDER SE CTION 195 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). SINCE T AX WAS NOT DEDUCTED AS REQUIRED UNDER SECTION 195 OF THE ACT, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSES SEE UNDER SECTION 40(A)(IA) OF THE ACT. ACCORDING TO THE LD. D.R., E VEN THOUGH THE ASSESSEE CLAIMED THAT THE COMMISSION WAS PAID FOR SELLING OF GOODS AT FOREIGN COUNTRY, ON EXAMINATION OF EMAIL CORRESPONDENCES BE TWEEN THE PARTIES, THE ASSESSING OFFICER FOUND THAT THE PAYMENT WAS MA DE BY THE ASSESSEE FOR MANAGERIAL AND TECHNICAL SERVICES. THEREFORE, ACCORDING TO THE LD. 3 I.T.A. NO.274/MDS/17 C.O. NO.64/MDS/17 D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 4. ON THE CONTRARY, SHRI V. ELANGOVAN, THE LD. REPR ESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT WHAT WAS PAID BY THE ASSES SEE WAS SALES COMMISSION, AS PER AGREEMENT, AT THE RATE OF 10%. ACCORDING TO THE LD. REPRESENTATIVE, NO MANAGERIAL OR TECHNICAL SERVICES WERE RENDERED BY THE FOREIGN AGENT. THE FOREIGN AGENT PROCURED ORDERS O N BEHALF OF THE ASSESSEE. THEREFORE, ACCORDING TO THE LD. REPRESEN TATIVE, THE CIT(APPEALS) BY PLACING RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN CIT V. FAIZON SHOES PVT. LTD. (2014) 367 ITR 155 AND THE ORDER OF THIS TRIBUNAL IN INDIA SHOES EXPORT INDIA LTD. IN I.T.A. NO.1963/MDS/2014 DATED 04.02.2015, DELETED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE MATERIAL AVAILABLE ON RECORD INDICATES THAT THE FOR EIGN AGENT PROCURED ORDERS ON BEHALF OF THE ASSESSEE FOR SELLING OF GOO DS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT( APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE BY RIGHTLY PLACING RELIANCE O N THE JUDGMENT OF MADRAS HIGH COURT IN FAIZON SHOES PVT. LTD. (SUPRA) . IN VIEW OF THE 4 I.T.A. NO.274/MDS/17 C.O. NO.64/MDS/17 ABOVE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTE RFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CON FIRMED. 6. THE CROSS-OBJECTION FILED BY THE ASSESSEE IS ONL Y TO SUPPORT THE ORDER OF THE CIT(APPEALS). THEREFORE, THE SAME IS DISMISSED AS INFRUCTUOUS. 7. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE CROSS- OBJECTION OF THE ASSESSEE STAND DISMISSED. ORDER PRONOUNCED ON 16 TH FEBRUARY, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 16 TH FEBRUARY, 2018. KRI. , .156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ./*+ /RESPONDENT 3. 0 81 () /CIT(A)-7, CHENNAI 4. PRINCIPAL CIT-2, CHENNAI. 5. 69 .1 /DR 6. :' ; /GF.