RAMU S. DEORA, MUMBAI V. DCIT RG 12(3), MUMBAI

ITA 1704/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78686 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 12-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI H.L. KARWA, PRESIDENT, AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ITA NO. 1704/MUM/2012 (ASSESSMENT YEAR:2008-09) RAMU S. DEORA SAMBHAV CHAMBERS, 4 TH FLOOR SIR, P.M. ROAD, FORT MUMBAI-400 001. VS. DY. COMMISSIONER OF INCOME TAX RANGE 12(3) MUMBAI. (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. : AAMPD 2141 H ASSESSEE BY : SHRI N ISHIT GANDHI REVENUE BY : SHRI SANJEEV JAIN DATE OF HEARING : 17/04/2014 DATE OF PRONOUNCEMENT : 17/04/2014 O R D E R PER N.K. BILLAIYA, ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF CIT(A)- 23, MUMBAI DATED 27/12/2011 PERTAINING TO ASSESSMEN T YEAR 2008-09. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT( A) ERRED IN CONFIRMING DISALLOWANCE OF RS.10,78,418/- U/S. 40(A)(IA) FOR N ON- DEDUCTION OF TDS ON TERMINAL HANDLING CHARGES. 2. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEED INGS AO NOTICED THAT THE ASSESSEE HAS PAID TERMINAL HANDLING CHARGE S AMOUNTING TO RS.12,44,840/- TO VARIOUS PARTIES WHO HANDLED ASSES SEES EXPORT AT THE TERMINAL. THE ASSESSEE WAS ASKED TO EXPLAIN WHETHER TDS WAS MADE ON THESE PAYMENTS. IT WAS EXPLAINED THAT OUT OF THE TO TAL TERMINAL HANDLING CHARGES OF RS.12,44,840/-, RS.1,66,422/- IS COVERED BY A CERTIFICATE U/S. ITA NO.1704/M/12 AY:08-09 2 197(1) OF THE ACT AND THE BALANCE HAS BEEN PAID WIT HOUT DEDUCTION OF TAX. AO PROCEEDED TO MAKE DISALLOWANCE U/S. 40(A)(IA) OF THE ACT AND DISALLOWED RS.10,78,418/-. THE ASSESSEE CARRIED THE MATTER BEF ORE CIT(A) BUT WITHOUT ANY SUCCESS. 3. BEFORE US, THE COUNSEL FOR THE ASSESSEE STATED T HAT THERE WAS NO LIABILITY UPON THE ASSESSEE TO DEDUCT TAX AT SOURCE ON THE ALLEGED PAYMENT BECAUSE OF THE BOARDS CIRCULAR NO.723 DATED 19 TH SEPTEMBER, 1995. PER CONTRA, THE LD. DR RELIED UPON THE ORDER OF LOWER A UTHORITIES. 4. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE CIRCULAR OF THE BOARD NO.723 DATED 19/09/1995. THE CIRCULAR RELATES TO TAX DEDUCTION AT SOURCE FOR PAYMENT MADE TO FOREIGN SHI PPING COMPANIES AND AT POINT NO.5 THE CBDT HAS CLARIFIED THAT SINCE THE AGENT ACTS ON BEHALF OF THE NON-RESIDENT SHIP-OWNER OR CHARTERER, HE STEPS INTO THE SHOES OF THE PRINCIPAL. ACCORDINGLY, PROVISIONS OF SECTION 172 S HALL APPLY AND THOSE OF SECTION 194C AND 195 WILL NOT APPLY. A SIMILAR ADDI TION WAS DELETED BY THE TRIBUNAL IN ITA NO.105/MUM/2013 DATED 28/03/2014 WH EREIN THE TRIBUNAL HAS FOLLOWED THE CBDT CIRCULAR NO.723 DATE D 19/09/1995. AS THE PAYMENT IS COVERED BY THE CBDT CIRCULAR WE, THEREFO RE, SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT AO TO DELETE THE ADDITION OF 10,78,418/-. ` 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH APRIL, 2014. SD/- SD/- (H.L. KARWA) PRESIDENT (N.K. BILLAIYA) ACCOUNTANT MEMBER MUMBAI, DATED: 17/04/2014. JV. ITA NO.1704/M/12 AY:08-09 3 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.