Asst. Commissioner of Income Tax, Circle-2(1), Panaji V. Sri Ajit Ramakant Phatarpekar, Goa

ITA 145/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93577 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 29-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANAND S MARATHE LD
• Keywords: Deemed to accrue or arise in india
• Section: 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 145/PNJ/2014 : (A.Y 2010 - 11) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), PANAJI, GOA. (APPELLANT) VS. AJIT RAMAKANT PHATARPEKAR 601/602, 6 TH FLOOR, GERA IMPERIUM, PATTO PANAJI, GOA 403 001. (RESPONDENT) PAN : AFJPP5786N ITA NO. 146/PNJ/2014 : (A.Y 2010 - 11) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), PANAJI, GOA. (APPELLANT) VS. SMT. NEELAM AJIT PHATARPEKAR 601/602, 6 TH FLOOR, GERA IMPERIUM, PATTO PANAJI, GOA 403 001. (RESPONDENT) PAN : AFJPP5785R ITA NO. 66/PNJ/2014 : (A.Y 2010 - 11) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), PANAJI, GOA. (APPELLANT) VS. M/S. KARISHMA GLOBAL MINERAL PVT. LTD., KAMAT TOWER, 206, 2 ND FLOOR, PATTO PLAZA, PANAJI, GOA PAN : AADCK4237B (RESPONDENT) CO NO. 22/PNJ/2014 (IN ITA NO. 66/PNJ/2014 ) : (A.Y 2010 - 11) M/S. KARISHMA GLOBAL MINERAL PVT. LTD., KAMAT TOWER, 206, 2 ND FLOOR, PATTO PLAZA, PANAJI, GOA PAN : AADCK4237B (CROSS OBJECTOR) VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 1(1), PANAJI, GOA. (RESPONDENT) ASSESSEE BY : JITENDRA JAIN, ADV. REVENUE BY : ANAND S. MARATHE, LD. DR DATE OF HEARING : 14/07/2015 DATE OF PRONOUNCEMENT : 14/07/2015 2 ITA NOS. 145, 146 & 66/PNJ/2014 & CO NO. 22/PNJ/2014 (A.Y : 2010 - 11) O R D E R PER GEORGE MATHAN : 1. ITA NO. 145/PNJ/2014 IS AN APPEAL FILED BY THE REVENUE IN THE CASE OF SHRI AJIT R. PHATARPEKAR AND ITA NO. 146/PNJ/2014 IS AN APPEAL FILED BY THE REVENUE IN THE CA SE OF SMT. NEELAM AJIT PHATARPEKAR AGAINST THE COMMON ORDER OF CIT(A), PANAJI IN ITA NO. 27/28/PNJ/13 - 14 DT. 15.1.2014 FOR A.Y 2010 - 11. ITA NO. 66/PNJ/2014 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A), PANAJI IN ITA NO. 118/PNJ/2013 - 14 DT . 26.11.2013 FOR THE A.Y 2010 - 11 AND CO NO. 22/PNJ/2014 IS THE CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE APPEAL OF THE REVENUE IN ITA NO. 66/PNJ/2014. SHRI JITENDRA JAIN, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEES AND SHRI ANAND S. MARATHE, L D. DR REPRESENTED ON BEHALF OF THE REVENUE. 2. AS THE ISSUES IN ALL THE APPEALS ARE IDENTICAL, THE SAME ARE DISPOSED OFF BY THIS COMMON ORDER. 3. BEING NOT SATISFIED WITH THE ORDER OF THE TRIBUNAL, THE ASSESSEES HAD FILED AN APPEAL BEFORE THE HON'BLE BOM BAY HIGH COURT AT GOA AND THE HON'BLE HIGH COURT VIDE ORDER DT. 9.4.2015 RESTORED THE MATTER BACK TO THE FILE OF THE TRIBUNAL FOR DECIDING THE ISSUE WITH REGARD TO SEC. 40(A)(IA) OF THE INCOME TAX ACT IN RESPECT OF DEMURRAGE AFRESH AFTER HEARING THE PARTIE S. AT THE TIME OF HEARING, THE LD. AR AS ALSO THE LD. DR AGREED BEFORE US THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE ORDER OF THIS BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S. KARISHMA GOA MINERAL TRADING PVT. LTD. IN I.T.A.NO. 19/PNJ/2014 DATED 18/06/2015. WE FIND THAT THE TRIBUNAL IN THE CASE OF M/S. KARISHMA GOA MINERAL TRADING PVT. LTD. ( SUPRA ) HELD AS UNDER: - 3 ITA NOS. 145, 146 & 66/PNJ/2014 & CO NO. 22/PNJ/2014 (A.Y : 2010 - 11) 2. IT WAS SUBMITTED BY THE LD. DR THAT THE AO HAD DISALLOWED DEMURRAGE PAYMENTS MADE BY THE ASSESSEE TO THE FOREIGN BUYER ON THE GROUND THAT THE ASSESSEE HAD NOT DEDUCTED TDS U/S 195 OF THE ACT. IT WAS THE SUBMISSION THAT THE LD. CIT(A) DELETED THE ADDITION BY HOLDING THAT TDS WAS NOT LIABLE TO BE DEDUCTED IN RESPECT OF DEMURRAGE PAYMENT MADE BY THE ASSESSEE TO THE FOREIGN BUYER. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE REVERSED. 3. IN REPLY, THE LD. AR SUBMITTED THAT THE ASSESSEE IS AN IRON ORE EXPORTER. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD SOLD GOODS REP RESENTING IRON ORE ON FOB BASIS TO CHINA BASED COMPANY. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD TO DELIVER THE GOODS AT GOA PORT. IT WAS THE FURTHER SUBMISSION THAT AS PER THE AGREEMENT, IF THERE WAS A DELAY IN LOADING OF THE GOODS ON THE SHIP HIRED BY THE PURCHASER, THE ASSESSEE WAS TO PAY THE DEMURRAGE. AS THERE WAS A DELAY IN LOADING OF THE GOODS, THE ASSESSEE HAD PAID THE DEMURRAGE OF RS. 94,18,640/ - TO THE SAID CHINA BASED COMPANY. IT WAS THE SUBMISSION THAT THE AO HAS RECOGNISED THAT THE DEMUR RAGE HAS BEEN PAID TO THE VARIOUS SUPPLIERS IN CHINA. THE LD. AR DREW OUR ATTENTION TO THE PROVISIONS OF SEC. 9(1)(I), EXPLANATION (1)(B) TO SUBMIT THAT WHEN THE PAYMENT IS MADE TO THE PURCHASER OF GOODS WHICH ARE EXPORTED AND THE PURCHASER IS A NON - RESID ENT, NO INCOME SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA IN THE HANDS OF THE SAID FOREIGN PURCHASER. IT WAS THE SUBMISSION THAT THE HON'BLE SUPREME COURT IN THE CASE OF GE INDIA TECHNOLOGY CENTRE P. LTD. REPORTED IN 327 ITR 456 HAS CATEGORICALLY HELD TH AT TAX IS LIABLE TO BE WITHHELD ONLY IF THE SUM PAID RESULTS INTO ANY INCOME CHARGEABLE TO TAX IN INDIA. IT WAS THE SUBMISSION THAT THE INCOME OF THE FOREIGN PURCHASER WAS NOT LIABLE TO TAX IN INDIA AND CONSEQUENTLY, THERE WAS NO LIABILITY TO DEDUCT TDS U /S 195. THE LD. AR ALSO DREW OUR ATTENTION TO THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SESA GOA IN ITA NO. 72/PNJ/2012 DT.8.3.2013 WHEREIN THE SAID PROPOSITION HAS BEEN ACCEPTED BY THE COORDINATE BENCH OF THIS TRIBUNAL. IN THE SAID ORDER, THE COORDINATE BENCH HAS HELD THAT AS PER EXPLANATION - (1)(B) TO SEC. 9(1)(I) IT IS PROVIDED THAT IN CASE OF A NON - RESIDENT NO INCOME SHALL BE DEEMED TO ACCRUE OR ARISE IN INDIA THROUGH OR FROM THE OPERATIONS WHICH ARE CONFINED TO THE PURCHASE OF GOODS IN INDIA FOR THE PURPOSE OF EXPORT. THE NON - RESIDENT BUYER HAD GOT COMPENSATION TOWARDS DEMURRAGE INCURRED THROUGH THE OPERATION WHICH ARE CONFINED TO THE PURCHASE OF GOODS AND CONSEQUENTLY, THE SAID DEMURRAGE CANNOT BE DEEMED TO BE INCOME WHICH HAS ACCRUED OR ARISEN IN THE HANDS OF THE FOREIGN BUYER IN INDIA AND THEREFORE, IS NOT TAXABLE IN INDIA AND IS NOT LIABLE TO TAX DEDUCTION AT SOURCE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE ISSUE IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SESA GOA REFERRED TO SUPRA AND THE LD. CIT(A) HAS FOLLOWED THE SAME, AS ALSO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GE TECHNOLOGY REFERRED TO SUPRA, WE ARE OF THE VIEW THAT THERE IS NO ERROR IN THE ORDER OF THE LD. CIT(A) WHICH CALLS FOR OUR INTERFERENCE. 4 ITA NOS. 145, 146 & 66/PNJ/2014 & CO NO. 22/PNJ/2014 (A.Y : 2010 - 11) 5. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 4 . THE FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWING THE PRECEDENT, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE GROUNDS OF APPEAL OF THE REVENUE ON THIS ISSUE IN THE CASE OF ALL THE ASSESSEES. 5. IN THE RESULT, THE APPEALS FILED BY THE REVENUE B EING ITA NOS. 145/PNJ/2014, 146/PNJ/2014 AND 66/PNJ/2014 STAND DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE BEING CO NO. 22/PNJ/2014 STANDS DISMISSED AS INFRUCTUOUS AS THIS ISSUE DOES NOT ARISE IN THE CROSS OBJECTION FILED BY THE ASSESSEE. ORD ER PRONOUNCED IN THE OPEN COURT ON 14/07/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 1 4 /07/ 201 5 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 5 ITA NOS. 145, 146 & 66/PNJ/2014 & CO NO. 22/PNJ/2014 (A.Y : 2010 - 11) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 14/07/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 14/07/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 5 /07/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 5 /07/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 5 /07/2015 SR.PS 6. DATE OF PRONOUNCEMENT 14/07/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 1 5 /07/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER