Shri Raxesh Chandravadan Satia (H.U.F.), Ahmedabad V. The Dy. CIT, Circle-5(2)., Ahmedabad

ITA 1769/AHD/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5411 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 21-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LALIT P JAIN
• Assessee Lawyers: RUCHIKA NAGAR
• Keywords: TDS
• Section: 143(3); 5(2); 40(a)(ia); 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SHRI RAKESH CHANDRAVADAN SATIA (HUF), 108, AKASHRATH COMPLEX, OPP. NATIONAL HANDLOOM, OFF. C. G. ROAD, AHMEDABAD PAN: AAFHS5466P (APPELLANT) VS THE D CIT, CIRCLE - 5(2) , AHMEDABAD (RESPONDENT) REVENUE BY : S H RI LALIT P. JAIN , SR. D . R. ASSESSEE BY: SHRI RUCHIKA NAGAR, A.R. DATE OF HEARING : 18 - 10 - 2 018 DATE OF PRONOUNCEMENT : 30 - 10 - 2 018 / ORDER P ER : AMARJIT SINGH, AC COUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A. Y. 2012 - 13 , ARI SES FROM ORDER OF THE CIT(A) - 5, AHMEDABAD DATED 22 - 05 - 2 017 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2 . THE SOLITARY GROUND OF APPEAL IN THIS CAS E IS AGAINST THE DECISION OF LD. CIT(A) IN CONFIRMING THE ADDITION TO THE EXTENT OF RS. 3 , 90 , 909/ - ON ACCOUNT OF NON - DEDUCTION OF TAX AT SOURCE U/S. 40(A)(IA) OF THE ACT. I T A NO . 1769 / A HD/20 17 A SS ESSMENT YEAR 2013 - 14 I.T.A NO. 1769 /AHD/20 17 A.Y. 2013 - 14 PAGE NO SHRI RAKESH CHANDRAVADAN SATIA (HUF). VS. D CIT 2 3 . THE BRIEF FACT OF THE CASE IS THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 18 TH SEP, 2013 DECLARING TOTAL INCOME AT RS. 30 , 50 , 850/ - . SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT. DURING T H E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS DE BITED IN P & L A/C BY AMOUNT OF RS. 26 , 30 , 639 / - ON ACCOUNT OF SHIPP ING, CLEARING AND FORWARDING EXPENSES. THE ASSESSEE WAS ASKED TO FURNISH THE DETAIL OF TDS MADE ON ABOVE EXPENSES. THE ASSESSEE EXPLAINED THAT M/S. C JI V RAM JOS H I & SONS WERE WORKING AS CLEARING AND FORWARDING AGENT AND INCURRING THE SEA FREIGHT AND OTHER CHARGES ON ASSESSEE,S BEHALF WHICH WERE SUBSEQUENTLY REIMBURSED BY THE ASSESSEE TO THEM. THE ASSESSEE ALSO EXPLAINED THAT TAX WAS DEDUCTED IN RESPEC T OF AGENCY CHARGES . B UT NO TAX HAS BEEN DEDUCTE D IN RESPECT OF SEA FREIGHT CHARGES PAID TO SHIPPING COMPAN Y NAMELY MSC MEDITERRANEAN W HI CH W AS NOT SUBJECT TO TDS . IT WAS FURTHER MENTIONED THAT ASSESSEE HA D ALSO MADE CERTAIN PAYMENT TO HE TAL CLEARING AND FORWARDING, APL PVT. LTD. AND LALDHAR PASSO , H OWEVER, NO TDS HA D BEEN DEDUCTED STATING THAT THESE EXPENSES WERE ONLY REIMBURSEMENT. THE ASSESSING OFFICER HA D NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE STATING THAT ASSESSEE FAILED TO FURNISH THE COPY OF CONTRACT AND HELD T H AT EXPENSES CLAIMED BY THE ASSESSEE UNDER SHIPPING CLEARING AND F ORWARDING WERE TO BE DISALLOWED U/S. 40(A)(IA) OF T HE ACT. THEREFORE, THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 6 , 12 , 186/ - IN THE TOTAL INCOME OF T HE ASSESSEE. 4. AGGRIEVED ASSESSEE FI LED APPEAL BEFO RE T H E LD. CIT(A). THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL O F THE ASSESSEE. THE RELEVANT PART OF THE D E CIS I ON OF LD. CIT(A) IS REPRODUCED AS UNDER: - DECISION: 4.3. THE ONLY ISSUE IN APPEAL IS REGARDING DISALLOWANCE OF RS.6,12,186/ - U /S.40(A)(IA) OF THE ACT, THE AO HAS NOTICED THAT THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.26,30,639/ - ON ACCOUNT OF SHIFTING, CLEARING AND FORWARDING EXPENSES. OUT OF THESE EXPENSES, THE AO HAS NOTICED THAT THE ASSESSEE HAS NOT DEDUCTED TAX ON EXPENSES AMOU NTING TO RS.6,12,186/ - . THEREFORE, THE AO HAS DISALLOWED THE SAME U/S.40(A)(IA) OF THE ACT. 4.4. DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS CONTENDED THAT THERE ARE TWO TYPES OF PAYMENTS MADE TO THE CLEARING AND FORWARDING AGENTS ONE IN RESPECT OF REIMBURSEMENT OF ACTUAL EXPENSES SUPPORTED BY VOUCHERS AND ANOTHER IS THE PAYMENTS I.T.A NO. 1769 /AHD/20 17 A.Y. 2013 - 14 PAGE NO SHRI RAKESH CHANDRAVADAN SATIA (HUF). VS. D CIT 3 MADE IN RESPECT OF SERVICES GIVEN BY THE AGENTS. IT IS FURTHER SUBMITTED THAT NO TDS HAS BEEN MADE IN RESPECT OF REIMBURSEMENT OF EXPENSES. IT IS FURTHER CONTENDED THAT OU T OF 5 AGENTS 4 ARE BELOW THE LIMIT PRESCRIBED UNDER THE LAW AND THERE IS NO CASE OF MAKING TDS FROM THE PAYMENTS MADE THE AGENTS. 4.5. FACTS OF THE CASE AND THE SUBMISSIONS ARE CONSIDERED. THE APPELLANT HAS MADE HIS CASE ON THE GROUND THAT THESE EXPENS ES ARE MERELY REIMBURSEMENT EXPENSES THEREFORE TDS IS NOT REQUIRED. THE AO HAS ASKED THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS TO FURNISH COPIES OF CONTACT BUT THE ASSESSEE HAS FAILED TO FURNISH THE SAME. IN THE ABSENCE OF THE SAME, RELATIONSHIP BETWE EN THE APPELLANT AND THE AGENTS CANNOT BE ASCERTAINED AND IT CANNOT BE SAID THAT ASSESSEE WAS NOT LIABLE TO DEDUCT TAX FROM THESE PAYMENTS. HOWEVER, WITH REGARD TO PAYMENTS TO HETAL CLEARING FDAG OF RS.62,224/ - , PAYMENTS TO APL (I) PVT, LTD, OF RS.33,964/ - , PAYMENTS TO LILADHAR PASSO OF RS.69,747/ - AND OTHER CHARGES PAID TO CJIVRAM JOSHI & CO. OF RS.55,342/ - , THE AO IS DIRECTED TO VERIFY THE SAME AND IF THE PAYMENTS ARE BELOW THE PRESCRIBED LIMIT THEN DELETE THE ADDITION. THE BALANCE ADDITION IS CONFIRMED. T HUS THE GROUND OF APPEAL IS PARTLY ALLOWED SUBJECT TO VERIFICATION. 5. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD CAREFULLY. THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS. 26,30,639/ - ON ACCOUNT OF SHIPPING CLEARING AND FORWARDING EX PENSES. OUT OF THESE EXPENSES, AN AMOU N T OF RS. 6 , 12 , 186/ - WAS DISALLOWED ON THE GROUND THAT ASSESSEE H A S NOT DEDUCTED TAX ON SUCH EXPENSES. THE LD. CIT(A) HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE DIRECTING THE ASSESSING OFFICER TO VERIFY THE PAYME NT S TO HET AL CLEARING RS. 62 , 224/ - , AP L(I) PV T. LTD. RS. 33 , 964/ - AND LILADHAR PASSO RS. 69 , 747/ - AND OTHER CHARGES PAID TO SHRI JIVRAM JOSHI & CO RS. 55 , 342/ - AN D IF THE PAYMENT IS BELOW PRESCRIBED LIMIT THEN THE ADDITION TO BE DELETED . IN THIS CONNECT ION, WE OBSERVED THAT ASSESSEE CLAIMED THA T IT HA D NOT DEDUCTED TDS ON THE EXPENSES WHICH WERE MERELY REIMBURSEMENT NATURE OF EXPENS ES. W E OBSERVE THAT LOWER AUTHORITIES HA D NOT CONTR OVERT ED THE CLAIM OF THE ASSESSEE THAT TDS ON THE IMPUGNED EXPENSES W ERE NOT DEDUCTED BECAUSE OF BEING REIMBURSEMENT EXPENSES. IT IS NOTICED THAT ASSESSEE HAS MADE TWO KINDS OF PAYMENT S TO THE CLEARING AND FORWARDING AGENTS ONE IN RESPECT OF REIMBURSEMENT OF ACTUAL EXPENSES AND OTHER IN RESPECT OF SERVICE S PROVIDED BY THE AGENTS. I N THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANCES , WE ARE OF THE VIEW THAT IT WILL BE APPROPRIATE TO VERIFY THE CLAIM OF THE ASSESSEE ON THE BASIS OF RELEVANT SUPPORTING BILLS AND VOUCHERS TO FIND OUT THE EXPENSES IN THE CATEGOR Y OF REIMBURSEMENT EXPENSES AND THE OTHER CATEGORY OF EXPENSES FOR THE SERVICES PROVIDED BY THE AGENTS. I.T.A NO. 1769 /AHD/20 17 A.Y. 2013 - 14 PAGE NO SHRI RAKESH CHANDRAVADAN SATIA (HUF). VS. D CIT 4 THEREFORE, WE RESTORE THIS ISSUE TO THE FILE OF ASSESS ING OFFICER FOR DECID ING DE NOVO AS DIRECTED ABOVE AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THEREFORE, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ON OUNCED IN THE OPEN C OURT ON 30 - 10 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 30 /10 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,