INDIA GATEWAY TERMINAL PRIVATE LIMITED ,ICTT, VALLARPADAM V. THE JOINT COMMISSIONER OF INCOME TAX (OSD), CIRCLE 1(2), KOCHI, KOCHI

ITA 546/COCH/2023

AI Insights

The case involves India Gateway Terminal Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre, Delhi, for the Assessment Years 2007-08 & 2009-10. The appellant, engaged in operating and developing the Rajeev Gandhi Container Terminal at Cochin Port, contested the disallowances made by the ACIT, Circle 1(2), Kochi, which included non-deduction of tax at source on management fees payable to M/s. Dubai Port World, and disallowances under sections 40(a)(ia) and 14A of the Income Tax Act, 1961. The CIT(A) had dismissed the appeals ex parte, leading to the current appeal before the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 38553 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Other Referred Cases: PCIT vs. Premkumar Arjundas Luthra 279 CTR 614
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJIT KUMAR DAS
• Assessee Lawyers: REMYA S. MENON
• Keywords: TDS; Earning of tax free income; Permanent establishment
• Section: 195; 143(1); 14A; 40(a)(ia)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PRAKASH CHAND YADAV, JM ITA Nos. 545 & 546/Coch/2023 Assessment Years: 2007-08 & 2009-10 India Gateway Terminal Pvt. Ltd. .......... Appellant ICCT, Vallarpadam B.O., Mulavukad Ernakulam 682505 [PAN: AABCI3293F] vs. ACIT, Circle - 1(2) .......... Respondent C.R. Building, I.S. Press Road Kochi 682018 Appellant by: Ms. Remya S. Menon, CA Respondent by: Shri Sanjit Kumar Das, CIT-DR Date of Hearing: 22.01.2025 Date of Pronouncement: 11.02.2025 O R D E R Per: Inturi Rama Rao, AM These appeals filed by the assessee are directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 19.05.2023 for Assessment Years (AYs) 2007-08 & 2009-10. 2. Brief facts of the case are that the appellant is a company incorporated under the provisions of the Companies Act. It is engaged in the business of operating and developing the Rajeev 2 ITA Nos. 545 & 546/Coch/2023 India Gateway Terminal Pvt. Ltd. Gandhi Container Terminal at Cochin Port. The return of income for AY 2009-10 was filed on 30.09.2009 declaring loss of Rs. 7,83,77,100/-. Against the said return of income, the assessment was completed by the ACIT, Circle 1(2), Kochi (hereinafter called \"the AO\") vide order dated 14.11.2011 passed u/s. 143(1) of the Income Tax Act, 1961 (the Act) at a total loss of Rs. 4,47,28,321/-. While doing so, the AO made disallowance or the management fees payable to M/s. Dubai Port World of Rs. 2,93,59,617/- on the ground that the appellant had failed to deduct tax at source under the provisions of section 195 of the Act. The AO also disallowed the claim for deduction u/s. 40(a)(ia) of the Act in the year of payment of tax deduction at source of Rs. 31,315/- on the ground that the appellant had failed to remit the TDS amount in respect of the above sum. The AO also made a disallowance of Rs. 42,58,027/- u/s. 14A of the Act. 3. Being aggrieved, an appeal was filed before the CIT(A), challenging the above additions made on the ground that in respect of payment of Rs. 2,93,59,617/- there was no liability to deduction tax at source in the absence of a permanent establishment. As regard to the disallowance u/s. 14A it was contended that no expenditure was incurred in relation to earning of exempt income. Further it is pleaded that the disallowance, if any, warranted should be restricted to extent of exempt income. The CIT(A) dismissed the appeals exparte. 3 ITA Nos. 545 & 546/Coch/2023 India Gateway Terminal Pvt. Ltd. 4. Being aggrieved, the assessee is in appeals before the Tribunal in the present appeal. 5. We have heard the rival contentions of both the parties and perused the material available on record. We find that the learned CIT(A) dismissed the appeals in limine for non prosecution. It is the settled position of law that the CIT(A), even while disposing of the appeal exparte, is duty bound to dispose of the appeal on merits. Reliance in this regard can be placed on the decision of the Hon'ble Bombay High Court in the case of PCIT vs. Premkumar Arjundas Luthra 279 CTR 614. Therefore, in the light of the above legal position we are of the considered view that the matter requires to be remanded to the file of the CIT(A) with the direction to dispose of the appeals de novo on merits after affording reasonable opportunity of hearing to the assessee. 6. In the result, the appeals filed by the assessee are allowed for statistical purposes Order pronounced in the open court on 11th February, 2025. Sd/- Sd/- (PRAKASH CHAND YADAV) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 11th February, 2025 n.p. 4 ITA Nos. 545 & 546/Coch/2023 India Gateway Terminal Pvt. Ltd. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "