ITO, WARD - 1(2), Vijayawada V. Sri Rameswarlal Guptha, Vijayawada

ITA 125/VIZ/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1155 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A RAMESH KUMAR
• Section: 143(3); 194C

Judgement Text

ITA NO.125/VIZAG/2013 RAMESWARALAL GUPTHA, VIJAYAWADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NO.125/VIZAG/2013 ( / ASSESSMENT YEAR: 2009-10) ITO, WARD - 1(2), VIJAYAWADA VS. RAMESWARALAL GUPTHA, VIJAYAWADA [PAN: ADWPG6896M ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI A. RAMESH KUMAR, DR / RESPONDENT BY : SHRI D.L.NARASIMHA RAO, AR / DATE OF HEARING : 18.05.2016 / DATE OF PRONOUNCEMENT : 20.05.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), VIJAYAWADA DATED 18.12.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS AN INDIVIDUAL CARRYING ON THE BU SINESS AS A WHOLESALE DEALER IN FOODGRAINS, PULSES, HUSK, ETC. IN THE NAME AND STYLE ITA NO.125/VIZAG/2013 RAMESWARALAL GUPTHA, VIJAYAWADA 2 OF M/S. VINAYAKA TRADERS. THE ASSESSEE HAD FILED I TS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, BY ADMITTING TOTA L INCOME OF RS.4,84,830/-. THE RETURN FILED BY THE ASSESSEE WA S PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CAL LED AS THE ACT) AND THEREAFTER THE ASSESSEES CASE WAS SELECTED FOR SCR UTINY AND AFTER DUE PROCESS, ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE A.O. HAS NOTED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.64,72,377/- TO WARDS SHIPPING CHARGES TO M/S. S.I. PARAMASIVA NADAR & SONS, CHENN AI AND NO TDS WAS DEDUCTED ON THE ABOVE PAYMENTS. WHEN THE A.O. HAS A SKED THE ASSESSEE AS TO WHY NO TDS WAS DEDUCTED, HE HAS SUBM ITTED THAT THE ASSESSEE HAS IDENTIFIED M/S. S.I. PARAMASIVA NADAR & SONS AS AN AGENT TO ACCOMPLISH HIS TASK AT PORT FOR ENTRY AND DUE TO THE ASSOCIATION AS AN AGENT, THE ASSESSEE HAS ALSO TRUSTED HIM TO ROUTE P AYMENTS TO VARIOUS THIRD PARTIES IN CONNECTION WITH RELEASE OF THE GOO DS FROM THE PORT FOR FORWARD TRANSFER TO THE PLACES OF THE REGISTERED OF FICE OF THE ASSESSEE AND THE AMOUNTS PAID IS ONLY REIMBURSEMENT OF EXPEN SES AND HENCE SECTION 40A(IA) OF THE ACT HAS NO APPLICATION. THE A.O. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, HE HAS OBSERVED TH AT M/S. S.I. PARAMASIVA NADAR & SONS IS WORKING ON BEHALF OF THE ASSESSEE AS A CLEARING AND FORWARDING AGENT AND HE IS RENDERING S ERVICES TO THE ITA NO.125/VIZAG/2013 RAMESWARALAL GUPTHA, VIJAYAWADA 3 ASSESSEE FROM THE POINT OF VIEW ARRIVAL OF GOODS TO THE PLACE OF REGISTERED OFFICE AND THE ASSESSEE IS LIABLE FOR DE DUCTION OF TAX ON SHIPPING CHARGES PAID TO M/S. S.I. PARAMASIVA NADAR & SONS U/S 194C OF THE ACT. THE ASSESSEE HAS FAILED TO DEDUCT THE TAX , THE PROVISIONS OF SECTION 40A(IA) OF THE ACT ARE ATTRACTED AND CLAIM OF ASSESSEE IS DISALLOWED AND THE SAME IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. ON APPEAL BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT ASSESSEE HAS PAID THE AMOUNTS TO M/S. S.I. PARAMASI VA NADAR & SONS AND IN TURN M/S. S.I. PARAMASIVA NADAR & SONS PAID THE AMOUNTS TO NON- RESIDENT SHIPPING COMPANIES AND HE HAS FILED THE DE TAILS OF THE VARIOUS SHIPPING COMPANIES. THE LD. CIT(A) AFTER CONSIDERI NG THE DETAILS FILED BY THE ASSESSEE HELD THAT ASSESSEE IS NOT LIABLE TO DEDUCT TDS AND ADDITION MADE BY THE A.O. WAS DELETED. REVENUE CAR RIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 3. THE LD. D.R. HAS SUBMITTED THAT ASSESSEE HAS NOT FILED ANY AGREEMENT BETWEEN THE ASSESSEE AND M/S. S.I. PARAMA SIVA NADAR & SONS AND HE HAS ALSO NOT FILED ANY DETAILS IN RESPE CT OF PAYMENTS MADE BY M/S. S.I. PARAMASIVA NADAR & SONS, BEFORE THE A. O. THESE DETAILS WERE ONLY FILED BEFORE THE LD. CIT(A) AND SUBMITTED THAT IT IS A VIOLATION OF RULE 46A OF THE INCOME TAX RULES. ITA NO.125/VIZAG/2013 RAMESWARALAL GUPTHA, VIJAYAWADA 4 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE HAS SUBMITTED THAT THE EXPENSES PAID BY THE ASSESSEE ARE ONLY REI MBURSEMENT OF THE EXPENSES INCURRED BY M/S. S.I. PARAMASIVA NADAR & S ONS AND THEREFORE NO TDS HAS TO BE DEDUCTED. HE FURTHER SUBMITTED TH AT ALL THE PAYMENTS ARE MADE TO THE NON-RESIDENT SHIPPING COMPANIES AND HENCE SECTION 194C OF THE ACT HAS NO APPLICATION. ALTERNATIVELY, HE HAS SUBMITTED THAT ALL THE PAYMENTS HAVE ALREADY BEEN MADE BEFORE 31 ST MARCH, 2009. THEREFORE, AS PER THE JUDGEMENT OF THE SPECIAL BENC H OF ITAT VISAKHAPATNAM IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS, VISAKHAPATNAM VS. ACIT, THE ISSUE IS COVERED IN FAV OUR OF THE ASSESSEE. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETHER SECTI ON 194C OF THE ACT APPLIES TO THE FACTS OF THE ASSESSEES CASE OR NOT? THE CASE OF THE ASSESSEE IS THAT M/S. S.I. PARAMASIVA NADAR & SONS IS AN AGENT AND TRUSTEE OF THE ASSESSEE AND HE HAS PAID CERTAIN AMO UNTS TO THE THIRD PARTIES I.E. NON-RESIDENT SHIPPING AGENCIES FOR SER VICES RENDERED AND NO TDS PROVISIONS ARE APPLICABLE TO THE ASSESSEES CAS E. HOWEVER, THE ASSESSEE HAS NOT FILED ANY AGREEMENT ENTERED WITH M /S. S.I. PARAMASIVA NADAR & SONS AND NO DETAILS IN RESPECT OF THE PAYME NTS MADE TO THIRD PARTIES ARE FILED BEFORE THE A.O. ACCORDINGLY, A.O . HAS HELD THAT SECTION ITA NO.125/VIZAG/2013 RAMESWARALAL GUPTHA, VIJAYAWADA 5 194C OF THE ACT IS APPLICABLE TO THE ASSESSEES CAS E. ON APPEAL, THE ASSESSEE HAS FILED ALL THE DETAILS BEFORE THE CIT(A ), IN RESPECT OF PAYMENTS MADE TO THE THIRD PARTIES. DURING THE COU RSE OF HEARING, WE ASKED THE LD. COUNSEL FOR THE ASSESSEE TO ESTABLISH THAT THE PAYMENTS IN RESPECT OF THIRD PARTIES ARE RELATING TO THE ASSESS EE. THE LD. COUNSEL FOR THE ASSESSEE IS NOT ABLE TO EXPLAIN THE QUERY RAISE D BY THE BENCH. THAT APART, THE ASSESSEE HAS NOT FILED ALL THE DETAILS I N RESPECT OF THE PAYMENT MADE TO THIRD PARTIES. IN VIEW OF THE ABOVE, IN TH E INTEREST OF JUSTICE, WE SET ASIDE THE ORDER PASSED BY THE CIT(A) AND REM IT THE MATTER BACK TO THE FILE OF THE A.O. WITH DIRECTION TO THE ASSES SEE TO SUBMIT ALL THE DETAILS IN RESPECT OF PAYMENTS MADE TO THE THIRD PA RTIES AND A.O IS DIRECTED TO DECIDE THE ISSUE IN ACCORDANCE WITH LAW , DE-NOVO, AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE. 6. IN SO FAR AS ALTERNATIVE ARGUMENT OF THE LD. COU NSEL FOR THE ASSESSEE IS CONCERNED, THE ASSESSEE HAS FAILED TO F ILE DETAILS OF THE PAYMENTS ALONG WITH DATES. THEREFORE, THE ASSESSEE IS DIRECTED TO FILE THE DETAILS OF THE PAYMENTS AND IF THE PAYMENTS ARE MADE BY THE ASSESSEE ON OR BEFORE 31 ST MARCH, 2009, AS PER PROVISIONS OF SECTION 40A(IA) OF THE ACT, DISALLOWANCE CANNOT BE MADE IN THE LIGHT OF THE DECISION OF THE HONBLE SPECIAL BENCH OF ITAT VISAK HAPATNAM IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS (SUPRA). ITA NO.125/VIZAG/2013 RAMESWARALAL GUPTHA, VIJAYAWADA 6 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 TH MAY16. SD/- SD/- ( . ) ( . ) (G. MANJUNATHA) (V. DURGA RAO) /ACCOUNTANT MEMBER /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 20.05.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO, WARD-1(2), VIJAYAWADA 2. / THE RESPONDENT SRI RAMESWARLAL GUPTA, D.NO.75- 7-14, NAGARJUNA STREET, BHAVANIPURAM, VIJAYAWADA 3. ) / THE CIT, VIJAYAWADA 4. ) ( ) / THE CIT(A), VIJAYAWADA 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM