The Anchor cargo Lines Pvt. Ltd., Ahmedabad V. The Income tax Officer,Ward-1(2), Ahmedabad

ITA 1059/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85629 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 15-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Recovery proceedings; Residential status; Principle of natural justice; Additional evidence; Reasonable cause
• Section: 194C; 147; 12; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. ITA. NO. 901/AHD/2012 (ASSESSMENT YEAR:2005-06) ITO, WARD-1(2), AHMEDABAD APPELL ANT VS. ANCHOR CAGROLINES PVT. LTD. 107, PANLEE COMPLEX, OPP: SARDAR PATEL SEVA SAMAJ HALL, MITHAKHALI SIX ROAD, ELLIS BRIDGE, AHMEDABAD- 380006 RESPONDENT & I. T.A. NO. 1059/AHD/2012 (ASSESSMENT YEAR: 2005-06) ANCHOR CAGROLINES PVT. LTD. 107, PANLEE COMPLEX, OPP: SARDAR PATEL SEVA SAMAJ HALL, MITHAKHALI SIX ROAD, ELLIS BRIDGE, AHMEDABAD- 380006 APPELLANT VS. ITO, WARD-1(2), AHMEDABAD RESPONDEN T I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 2 PAN: AACCA3353M / BY REVENUE :SHRI V. K. SINGH, SR. D.R. / BY ASSESSEE : SHRI S. N. DIVETIA, A.R. /DATE OF HEARING : 23.12.2014 !' /DATE OF PRONOUNCEMENT :23.01.2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THESE CROSS APPEALS ARE ARISING OUT FORM THE ORDER OF CIT(A)-6, AHMEDABAD, DATED 12.03.2012 FOR THE ASSES SMENT YEAR 2005-06. SO, THEY ARE BEING DISPOSED OF BY WA Y OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO. 901/AHD/2012, REVENUE HAS FILED THE A PPEAL ON THE FOLLOWING GROUNDS: 1. THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.1,26,85,501/- OUT O F TOTAL DISALLOWANCE OF RS.1,55,67,666/- MADE U/S 40(A)(IA) OF THE ACT. 2. THE LD. CIT (A) ERRED IN HOLD THAT AS PER CIRCU LAR NO.723, THERE WAS NO REQUIREMENT OF DEDUCTING TDS U/S 194C OF THE ACT. HOWEVER, THE LD. CIT(A) ERRED IN APPRECIATING THE FACTS THAT ASSESSEE HAD FAILED TO COMPLY WITH THE CONDITIONS LAID DOWN IN CIRCULAR NO.723. I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 3 3. THE LD. CIT (A) IGNORED THE GLARING FACT ON THE RECORD THAT THE ASSESSEE HAD FAILED TO ADDUCE ANY EVIDENCE WHICH COULD ESTABLISH THAT PAYMENTS WERE MADE TO THE SHIPPING AGENTS OF NON-REGISTERED SHIP OWNERS/CHARTERERS OR ITS AGENTS. 3. IN I.T.A. NO. 1059/AHD/2012, ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUNDS: 1.1 THE ORDER PASSED U/S.250 ON 12.3.2012 FOR A.Y. 2005- 06 BY CIT(A)-VI, ABAD UPHOLDING THE DISALLOWANCE TO THE EXTENT OF RS.28,82,501/- U/S.40(A)(IA) OF THE A CT IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGNED DISALLOWANCE. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE O F PAYMENTS TO THE EXTENT OF RS.28,82,501 TO O RIENT OVERSEAS CONTAINER LINE LTD AND P&O NEDLLOYD INDIA P. LTD. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF CASE AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THE DISALLOWANCE OF RS.28,82,501. 3.1 THE LD.CIT(A) HAS ERRED IN UPHOLDING THAT THE P AYMENT OF RS.25,74,072 TO ORIENT OVERSEAS CONTAINER LINE L TD AND RS.3,08,429 TO P&O NEDLLOYD INDIA P. LTD WERE N OT COVERED UNDER SAID CIRCULAR NO.723. 3.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE HELD TH AT ORIENT OVERSEAS CONTAINER LINE LTD AND P&O NEDLLOYD INDIA P. LTD WERE NOT FOREIGN SHIPPING LINES OR I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 4 PAYMENTS BY INDIAN AGENT OF FOREIGN SHIPPING LINES. THE LD. CIT(A) HAS ERRED IN CONSTRUING THE COPIES O F BILLS OF LADING AND IGNORING THE OTHER MATERIALS PRODUCED BEFORE HIM. 4.1 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN NOT DISPOSING OF THE GROUND OF APPEAL RAISED BY THE APPELLANT RELATING TO THE VALIDITY OF REOPENING OF CONCLUDED ASSTT. U/S 143(3). 4.2 THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE GR OUND OF APPEAL RELATING TO VALIDITY OF PROCEEDINGS INITIATE D U/S 147 BY AO 4. ASSESSING OFFICER MADE FIRST ADDITION OF RS.1,55 ,67,666/- UNDER THE PROVISIONS OF SECTION 40(A)(IA) ON ACCOUN T OF NON DEDUCTION OF TDS. 4.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY WHEREIN HAVING CONSIDERED THE SUBMISSION ON BEHALF OF ASSESSEE IT WAS FOUND THAT ASSESSING OFFICER DISALL OWED PAYMENTS MADE TO SHIPPING COMPANIES BY ASSESSEE ON GROUND THAT NO TDS WAS DEDUCTED AND PAID TO THE GOVERNMENT ACCOUNT AS REQUIRED U/S. 194C OF INCOME TAX ACT. A SSESSEE SUBMITTED COPIES OF BILLS OF LADING ISSUED BY THESE SHIPPING COMPANIES IN RESPECT OF ALL PAYMENTS. ASSESSEE REL IED ON CBDT CIRCULAR NO. 723 INTER ALIA ANY PAYMENT OF OCE AN FREIGHT TO FOREIGN SHIPPING LINES OR INDIAN AGENT OF FOREIG N SHIPPING LINES IS NOT SUBJECT TO TDS U/S.194C OR SECTION 195 SINCE THESE WERE SUBJECT TO SECTION 172 OF THE INCOME TAX ACT. ANY PERSON MAKES PAYMENT TO NONRESIDENT SHIPPING COMPANIES OR TO ANY AGENT OF SUCH SHIPPING COMPANY THEN PROVISIONS OF S ECTION I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 5 194C WILL NOT BE APPLICABLE AND ACCORDINGLY NON DED UCTION OF TDS WILL NOT RESULT IN DISALLOWANCE U/S.40(A)(IA) O F THE ACT. THE POSITION AS EMERGED FROM THE CIRCULAR NO. 723 AND J UDICIAL PRONOUNCEMENT ON THIS CAN BE CONCLUDED AS UNDER: I. IF ANY PAYMENT IS MADE TO AN INDIAN SHIPPING COMPANY WHICH IS ACTING AS SHIPPING LINE AND NOT AN AGENT OF NONRESIDENT SHIPPING COMPANY, REQUIREMENT OF DEDUCTING TAX U/S.194C WILL BE ATTRACTED. NON DEDU CTION OF TDS IN SUCH CASES WILL RESULT IN RELYING IN THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. II. ANY PAYMENT TO NONRESIDENT SHIPPING COMPANY WIL L NOT REQUIRE DEDUCTION OF TAX. THEREFORE, NON DEDUC TION OF TDS WILL NOT RESULT IN ANY DISALLOWANCE. III. PAYMENT TO INDIAN AGENT OF NONRESIDENT SHIPPIN G COMPANY WILL ALSO NOT REQUIRE DEDUCTION OF TAX AT S OURCE AND ACCORDINGLY NON DEDUCTION WILL NOT RESULT IN AN Y DISALLOWANCE. ASSESSING OFFICER IN SPITE OF CALLING FOR REMAND RE PORT DID NOT EXAMINE THE ISSUE FROM AVAILABLE DOCUMENTS WHETHER TDS WAS REQUIRED TO BE DEDUCTED OR NOT. IN THIS SITUATION, VERIFICATION WAS DONE BY CIT(A) HIMSELF AND HAVING VERIFIED ALL COPIES OF BILLS OF LADING, IT WAS FOUND THAT EXCEPT IN THREE CASES DISCUSSED BELOW, ALL PAYMENTS WERE FOUND TO BE MADE TO THE AGENT OF NON RESIDENT SHOPPING COMPANIES. WHILE SI GNING THE BILLS OF LADING, IT HAD BEEN CLEARLY MENTIONED THAT INDIAN COMPANY SIGNED THE SAME AS AN AGENT FOR AND ON BEHA LF OF NON RESIDENT SHIPPING COMPANY. THEREFORE, AS PER CIRCU LAR NO.723 AND VARIOUS DECISIONS ON THE ISSUE, ASSESSEE WAS HE LD TO BE NOT REQUIRED FOR DEDUCTING TDS U/S.194C. SINCE TDS WAS NOT I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 6 REQUIRED TO BE DEDUCTED. HENCE, THERE WAS NO QUEST ION OF DISALLOWANCE U/S.40(A)(IA) OF THE ACT. ACCORDINGLY , CIT(A) DELETED THE DISALLOWANCE OF RS.1,26,85,501/- OUT OF TOTAL DISALLOWANCE OF RS.1,55,67,666/- MADE UNDER THE PRO VISIONS OF SECTION 40(A)(IA) OF THE ACT. 4.2 SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF RE VENUE INTER ALIA SUBMITTED THAT CIT(A) WAS NOT JUSTIFIED IN DELETING THE DISALLOWANCE OF RS.1,26,85,501/-. CIT(A) ERRED IN HOLDING THAT AS PER CIRCULAR 723, THERE WAS NO REQUIREMENT OF DE DUCTING TDS U/S. 194C OF THE ACT. ACCORDINGLY, ORDER OF CI T(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. O N THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE O RDER OF CIT(A) TO THE EXTENT OF RELIEF GRANTED TO ASSESSEE AS MENTIONED ABOVE. 4.3 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD. WE ARE NOT INCLINED TO INTERFERE IN THE FI NDING OF CIT(A) BECAUSE CIT(A) HAVING VERIFIED ALL COPIES OF BILLS OF LADING AND EXPORT. SAME EXCEPT IN THREE CASES, ALL PAYMENTS W ERE MADE TO THE AGENT OF NONRESIDENT SHIPPING COMPANIES. THIS FACT HAS NOT BEEN DISPUTED ON BEHALF OF REVENUE. SO, CIT(A) WAS JUSTIFIED IN GRANTING RELIEF TO THE ASSESSEE TO THA T EXTENT. THIS CARE OF REVENUES APPEAL. 5. COMING TO THE ASSESSEES APPEAL, WE FIND THAT AS DISCUSSED ABOVE, ASSESSING OFFICER FOUND THAT IN FO LLOWING CASE, I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 7 PAYMENTS WERE MADE TO INDIAN SHIPPING COMPANIES AS SHIPPING LINE AND NOT AS AGENT OF NONRESIDENT SHIPP ING COMPANIES- 1- ORIENT OVERSEAS CONTAINER LINE LTD. RS.25,74,072 2- P & O NEDLLOYD INDIA PVT. LTD. RS. 3,08,429 3- THE SHIPPING CORPORATION OF INDIA LTD. RS.27,24, 994 ASSESSEE MADE PAYMENTS TO AFORESAID INDIAN SHIPPING COMPANIES IN CAPACITY AS PRINCIPAL SHIPPING AND NOT AS AGENT OF NONRESIDENT SHIPPING COMPANY. THIS WAS EVIDENT FROM THE BILLS OF LADING SIGNED BY THESE COMPANIES. IN THIS BACKGROUND, ASSESSING OFFICER OBSERVED THAT ANY PAYMENT TO THES E COMPANIES REQUIRED DEDUCTION OF TDS U/S. 194C SINCE CIRCULAR NO. 723 AND DECISIONS RELIED BY ASSESSEE WERE NOT A PPLICABLE. HOWEVER, IN CASE OF SHIPPING CORPORATION OF INDIA L IMITED, ASSESSEE SUBMITTED NO DEDUCTION CERTIFICATE ISSUED BY DCIT. TDS BY ORDER DATED 15.04.2004 FOR A.Y. 2005-06. IN VIEW OF THIS, CIT(A) OBSERVED HAT ASSESSEE WAS NOT REQUIRED TO DEDUCT TDS IN RESPECT OF PAYMENTS MADE TO SHIPPING CORPORA TION OF INDIA LTD. ACCORDINGLY, THERE WAS NO VIOLATION OF TDS PROVISIONS IN CASE OF PAYMENTS TO SHIPPING CORPORAT ION COULD NOT BE MADE. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE. HOWEVER, THERE WAS NO SUCH CERTIFICATE IN CASE OF OTHER TWO SHIPPING COMPANIES WHOM TOTAL PAYMENTS OF RS.25,74,072/- AND RS.3,08,429/- WERE M ADE WITHOUT DEDUCTING TDS. ACCORDING TO CIT(A), ASSESS EE VIOLATED PROVISIONS OF SECTION 194C IN RESPECT OF PAYMENTS M ADE TO I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 8 ORIENT OVERSEAS CONTAINER LINE LTD. AND P&O NEDLLOY D INDIA PVT. LTD. IN ABSENCE OF EXPLANATION FOR NOT DEDUCT ING TDS IN THESE CASES, DISALLOWANCE OF RS.28,82,501/- MADE UN DER PROVISIONS OF SECTION 40(A)(IA) WAS UPHOLD BY CIT(A ). 5.1 BEFORE US, LD. AUTHORIZED REPRESENTATIVE HAS AG ITATED THE SAME AS MENTIONED IN THE GROUNDS OF APPEAL RAISED B Y ASSESSEE. BESIDES THIS, LD. AUTHORIZED REPRESENTAT IVE FILED APPLICATION MADE U/S. 29 OF THE ACT RULES AS UNDER: THE APPLICANT ABOVE NAMED BEGS TO STATE AS UNDER: THE APPLICANT HAS FILED AN APPEAL AGAINST THE ORDER PASSED U/S 250 ON 12-3-2012 BY CIT(A)-VI A'BAD BEING ITA N O. 1059/A/2012 WHEREBY THE APPELLANT HAS CHALLENGED TH E DISALLOWANCE OF OCEAN CHARGES OF RS. 28,82,501/- U/ S 40(A)(IA) ON ACCOUNT OF NON DEDUCTION OF TDS U/S 19 4C. 2 DURING THE COURSE OF THE APPELLATE PROCEEDINGS TH E APPELLANT COULD NOT PRODUCE THE EVIDENCE BY WAY OF THE STATUS OF THE SHIPPING COS LIKE P & O NEDLLOYED (IN DIA) PVT LTD AND OOCL (INDIA) LTD BECAUSE THE SAID COMPANIES DID NOT PROVIDE THE SAME INSPITE OF REPEATED REQUESTS. AFTER THE DISPOSAL OF THE APPEAL THE APPELLANT ONCE AGAIN REQ UESTED THEM TO FURNISH THE EVIDENCE RELATING TO SEC 172. N OW THEY REALIZED THE CONSEQUENCES OF THE MATTER AND FURNISH ED US WITH THE DETAILS WHICH HAVE BEEN PRODUCED AT PAGES 9798- 101-102,104 TO 106 OF THE PAPER BOOK. CONSIDERING T HE FACTS NARRATED ABOVE AND IN THE INTEREST OF JUSTICE THE S AID EVIDENCE MAY PLEASE BE ADMITTED FAILING WHICH IT WO ULD CAUSE GREAT HARDSHIP AND INJUSTICE TO THE APPELLANT . THE ADDITIONAL EVIDENCE IS IN THE NATURE OF LEGAL DOCUM ENTS SO THAT THE SAME MAY PLEASE BE ADMITTED. LD. AUTHORIZED REPRESENTATIVE DREW OUR ATTENTION TO PAGE NO.97 OF THE PAPER BOOK FILED ON BEHALF OF ASSESSEE INTER ALIA P&O I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 9 NEDLLOYD (INDIA) PVT. LTD. VIDE ITS LETTER DATED 18 TH JANUARY, 2005 CERTIFIED AS UNDER: TO WHOMSOEVER IT MAY COCNERN REF: NON DEDUCTION OF TDS ON PAYMENT MADE TO P&O NEDLLOYD (INDIA) PVT. LTD. DEAR SIR, WE, M/S. P&O NEDLLOYD (INDIA) PVT. LTD. ARE SHIPPIN G AGENTS FOR M/S.P&O NEDLLOYD BV. ROTTERDAM, NETHERLANDS BRITISH MARITIME SHIPPING GIANT P&O GROUP (P&O CONTAINERS) AND THE COMPANY IS LISTED ON THE DUTCH STOCK EXCHANGE. WE HEREBY CONFIRM THAT AS PER PROVISION OF INCOME-TAX ACT 1961 BOTH OUR PRINCIPALS RESIDENTIAL STATUS ARE NON-RESIDENT AND THEY ARE ENGAGED IN THE OPER ATION OF SHIP. WE ON BEHALF OF M/S.P&O NEDLLOYD BV. ROTTERDAM, NETHERLANDS ARE REGULARLY FILING RETURN OF INCOME B ASED ON THE PROVISION OF SECTION 172 OF THE ACT FOR THE FRE IGHT CHARGES, TERMINAL HANDING CHARGES (THC) INLAND HAUL AGE CHARGES AND ANY OTHER AMOUNT OF A SIMILAR NATURE CO LLECTED BY US IN THE RESPECT OF GOOD SHIPPED AT PORTS IN IN DIA. WE HEREBY CONFIRM THAT THE ENTIRE AMOUNT PAYABLE BY YO U TOWARDS FREIGHT AND OTHER CHARGES MENTIONED ABOVE F OR HAS BEEN OR SHALL BE INCLUDED IN THE RETURN FILED BY U/ S 172 AND APPLICABLE TAX THEREON HAS BEEN PAID OR WILL BE PAI D. IN VIEW OF THE ABOVE AND CLARIFICATION GIVEN BY CBD T, VIDE CIRCULAR NO. 723 DT. 19.09.1995, THE PROVISION OF S ECTION 194C & 195 OF INCOME TAX ACT, 1961, FOR DEDUCTING O F TAX AT SOURCE SHALL NOT APPLY TO US IN RESPECT OF FREIGHT CHARGES, TERMINAL HANDLING CHARGES (THC) INLAND HAULAGE CHAR GES AND ANY OTHER AMOUNT OF A SIMILAR NATURE PAID TO US BY YOU AND ACCORDINGLY, NO TAX SHOULD BE DEDUCTED ON PAYME NT MADE TO US IN RESPECT OF ABOVE MENTIONED CHARGES. IN VIEW OF THE ABOVE, WE SHALL KEEP YOU FULLY INDEM NIFIED IN CASE ANY LIABILITY ARISE ON YOU TOWARDS THE TDS ON THE ABOVE I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 10 MENTIONED PAYMENTS MADE TO US AS AN AGENT OF M/S. P &O NEDLLOYD BY UNDER THE CURRENT PROVISIONS OF THE INC OME TAX ACT. THANKING YOU, YOURS FAITHFULLY 5.2 SIMILARLY WITH REGARDS TO ORIENT OVERSEAS CONTA INER LINE LTD. (HEREINAFTER REFERRED AS OOCL) CERTIFICATE D ATED 06 TH MAY, 2005 WAS SUBMITTED WHICH READS AS UNDER: 06 MAY, 2005 ORIENT OVERSEAS CONTAINER LINE LIMITED ('OOCL HK') IS A COMPANY, INCORPORATED UNDER THE LAWS OF HONG KONG. OOCL HK IS INVOLVED IN THE BUSINESS OF INTERNATIONA L OCEAN GOING CONTAINERIZED SERV ICES. OOCL HK RAISES INVOICES AND COLLECTS PAYMENTS IN ITS FAVOUR. WE INFORM YOU THAT THE PROVISION OF SECTION 172 OF THE ACT LAYS DOWN THE SCOPE AND MANNER OF LEVY AND RECOVERY OF TAX FROM THE NON-RESIDENT ENGAGED IN THE BUSINESS OF OP ERATION OF SHIPS. SECTION 172 OF THE ACT IS THE CODE BY ITSELF AND ENSURES RECOVERY OF TAXES FROM THE OWNERS/CHARTERER S OF THE VESSELS EARNING INCOME ON ACCOUNT OF GOODS SHIPPED AT THE PORTS IN INDIA OF EXPORT FREIGHT AND RELATED ANCILL ARY CHARGE. SECTION 172(1) OF THE ACT STATES THAT THE PROVISION S OF THE SECTION SHALL APPLY NOTWITHSTANDING ANYTHING CONTAI NED IN OTHER PROVISIONS OF THE ACT. IN THIS VIEW OF THE MA TTER, THE PROVISIONS OF SECTIONS 194C AND 195 OF THE ACT HAVE NO APPLICATION TO THE PAYMENTS MADE TO THE FOREIGN SHI PPING COMPANIES IN RESPECT OF EXPORT FREIGHT AND RELATED ANCILLARY CHARGES. THIS POSITION IS ACCEPTED BY THE CENTRAL B ORD OF DIRECT TAXES IN CIRCULAR NO. 723 DATED 19 TH SEPTEMBER, 1995 [215 ITR (ST) 116]. A COPY OF THE CIRCULAR IS ENCLOSED FOR YOUR READY REFERENCE. THIS CIRCULAR CLARIFIES D IE SITUATION THAT THE PROVISIONS OF SECTION 172 OF THE ACT SHALL APPLY TO THE SHIPPING BUSINESS OF NON-RESIDENTS AND THAT THE I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 11 PROVISIONS OF SECTION 194C AND 195 OF THE ACT HAS N O APPLICATION IN RESPECT OF THE PAYMENT TOWARDS EXPOR T FREIGHT AND RELATED ANCILLARY CHARGES ON ACCOUNT OF CARRIAG E OF GOODS SHIPPED AT A PORT IN INDIA. WE ARE REGULARLY FILING RETURNS OF INCOME BASED ON (HE PROVISIONS OF SECTION 172 OF THE ACT FOR ANY AMOUNT PAID OR PAYABLE TO US ON ACCOUNT OF CARRIAGE OF GOODS SHIPP ED AT A PORT IN INDIA. PLEASE TAKE A NOTE OF THE ABOVE AND EFFECT PAYMENT IN FAVOUR OF OOCL WITHOUT ANY TAX DEDUCTED AL SOURCE. IN THIS BACKGROUND, LD. AUTHORIZED REPRESENTATIVE S UBMITTED THAT ASSESSEE COULD NOT LAY DOWN ON THESE DOCUMENTS IN SPITE OF BEST EFFORTS OF ITS PART AND SUBSEQUENTLY HE WAS SUCCESSFUL TO LAY HAND TO RECEIVE THE ABOVE TWO CERTIFICATES. CO NTENTS OF THIS CERTIFICATE/LETTER GOES TO THE ROUTE OF ISSUE RAISE D. SO, SAME SHOULD BE ADMITTED REQUESTED ON BEHALF OF LD. AUTHO RIZED REPRESENTATIVE OF THE ASSESSEE. SAME WAS OPPOSED O N BEHALF OF LD. DEPARTMENTAL REPRESENTATIVE. 6. AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATERI AL ON RECORD WITH REGARD TO ADDITIONAL EVIDENCE, WE FIND THAT ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN NOT BEING SUCC ESSFUL TO LAY HANDS ON THESE DOCUMENTS WHICH GOES TO THE ROUT E OF THE ISSUE AT HAND. SO, IN THE INTEREST OF JUSTICE, WE ADMIT THIS EVIDENCE AND RESTORE THE MATTER TO ASSESSING OFFICE R WITH DIRECTION TO DECIDE AS PER FACT AND LAW AS RAISED I N ASSESSEES APPEAL WITH REGARDS TO DISALLOWANCE OF OCEAN CHARGE S OF RS.28,82,501/- U/S.40(A)(IA) ON ACCOUNT OF DEDUCTIO N OF TDS I.T.A. NOS. 901 & 1059/AHD/2012 FOR A.Y. 05-06 (ITO VS. ANCHOR CARGOLINES PVT. LTD. ) PAGE 12 U/S.194C WITH REGARDS TO OPPOSE TWO PARTIES AFTER P ROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. SINCE, WE ARE RESTORING THIS ISSUE ON TECHNICAL POINT, SO WE ARE REFRAINING TO COMMENT ON THE MERIT OF THE ISSUE AT HAND. 7. AS A RESULT, APPEAL OF REVENUE IS DISMISSED AND THAT OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON THIS THE 23 RD DAY OF JANUARY, 2015. SD/- SD/- (ANIL CHATURVEDI) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER TRUE COPY S.K.SINHA # # # # %& %& %& %& '&' '&' '&' '&' / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. ,, - / CONCERNED CIT 4. -- / CIT (A) 5. &12 %, , / DR, ITAT, AHMEDABAD 6. 256 78 / GUARD FILE. BY ORDER / # , 9/ , , ;