Adarsh Marine Enterprises Private Limited, CHENNAI V. DCIT, CHENNAI

ITA 1909/CHNY/2014

• Counselvise Citation: 190921714 RSA 2014
• Duration Of Justice: 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2008-2009
• Appeal Filed On: 07-07-2014
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN
• Assessee Lawyers: V SANKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO.1909/MDS/2014 / ASSESSMENT YEAR : 2008-09 M/S ADARSH MARINE ENTERPRISES PVT. LTD 175AM JAIHIND APARTMENTS VELACHERRY MAIN ROAD GOWRIVAKKAM CHENNAI 600 073 VS. THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE I91) CHENNAI [PAN ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI V. SANKAR, FCA /RESPONDENT BY : SHRI N. MADHAVAN, JCIT / DATE OF HEARING : 21-05-2015 ! / DATE OF PRONOUNCEMENT : 29 -05-2015 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX, APPEALS(CENTRAL)-I , CHENAI, DATED 27.3.2014 AND PERTAINS TO ASSESSMENT YEAR 2008-09. ITA NO. 1909/14 :- 2 -: 2. SHRI V. SANKAR, LD. REPRESENTATIVE FOR THE ASSESSE E SUBMITTED THAT THE ASSESSEE IS A MANPOWER PLACEMEN T AGENCY. IN ITS BUSINESS ACTIVITY, THE ASSESSEE RECEIVED ` 20,20,000/- TOWARDS PLACEMENT CHARGES. ACCORDING TO THE LD. REPRESENTA TIVE, THE ABOVE PLACEMENT CHARGES ARE TOWARDS IMPREST ACCOUNT WHICH INCLUDES COMMISSION AND FEES PAID TO TRAINING INSTITUTES. A CCORDING TO THE LD. REPRESENTATIVE, OTHER THAN THE COMMISSION OF THE A SSESSEE, ALL FEES AND IMPREST ACCOUNT ARE PAID DIRECTLY TO THE TRAINI NG INSTITUTES BY THE RESPECTIVE STUDENTS AND THE TRAINING INSTITUTES ISS UED RECEIPTS FOR THEM. SINCE THE PAYMENT WAS MADE THROUGH THE ASSESSEE, A CCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEE ACCOUNTED THE SAM E IN ITS BOOKS OF ACCOUNT AND CLAIMED THE SAME AS EXPENDITURE. IN FA CT, THE PAYMENT WAS DIRECTLY MADE TO THE SHIPPING COMPANY AND THE TRAINING INSTITUTES BY THE STUDENTS THEREFORE, ACCORDING TO THE LD. REP RESENTATIVE, MERELY BECAUSE THE ASSESSEE ENTERED THE RECEIPTS IN THE B OOKS OF ACCOUNT, THE SAME CANNOT BE TREATED AS FEE FOR TECHNICAL SER VICES OR OTHERWISE LIABLE FOR DEDUCTION OF TAX UNDER THE PROVISIONS OF THE INCOME-TAX ACT, 1961. 3. ON THE CONTRARY, SHRI N. MADHAVAN, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT FOR THE YEAR UNDER CO NSIDERATION THE ASSESSEE HAS RECEIVED IMPREST ACCOUNT TO THE EXTENT OF ` 86,43,639/-. ITA NO. 1909/14 :- 3 -: SINCE THE GROSS RECEIPTS OF THE ASSESSEE EXCEEDED ` 40 LAKHS, THE BOOKS OF ACCOUNT OF THE ASSESSEE IS EXPECTED TO BE AUDITED U/S 44AB OF THE ACT. HOWEVER, THE ASSESSEE HAS NOT OBTAINE D THE AUDIT REPORT. THE LD. DR FURTHER SUBMITTED THAT THE ASSESSEE HAS CLAIMED AGENCY FEE AND COURSE FEE AS EXPENDITURE IN THE BOOKS OF A CCOUNT. HOWEVER, NO TAX WAS DEDUCTED WHILE MAKING THE PAYMENT TO THE SHIPPING COMPANY/TRAINING INSTITUTE. ACCORDING TO THE LD. D R, THE ASSESSEE COLLECTED MONEY FROM THE PROSPECTIVE CANDIDATES, WH O WERE SEEKING EMPLOYMENT AND ENTERED ALL THE RECEIPTS IN ITS ACCO UNT. ACCORDING TO THE LD. DR, WHEN THE RECEIPTS ARE ENTERED IN THE A SSESSEES BOOKS OF ACCOUNT AND PAYMENTS ARE ALSO ACCOUNTED THEREIN THE ASSESSEE IS LIABLE TO DEDUCT TAX ON THE PAYMENT MADE TO THE SHI PPING COMPANY/TRAINING INSTITUTE. ON A QUERY FROM THE BE NCH UNDER WHAT PROVISIONS OF LAW THE ASSESSEE IS EXPECTED TO DEDU CT TAX, THE LD. DR VERY FAIRLY SUBMITTED THAT THE ASSESSING OFFICER HA S NOT REFERRED ANY PROVISION OF THE INCOME-TAX ACT, WHICH REQUIRES THE ASSESSEE TO DEDUCT TAX. ACCORDING TO THE LD. DR, WHEN THE ASS ESSEE PAID THE FEES TO THE TRAINING INSTITUTES, THE ASSESSEE IS EXPECT ED TO DEDUCT TAX. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. FROM THE MATERIAL AVAILABLE ON RECORD, IT APPEARS THAT THE ASSESSEE PAID FEE TO ITA NO. 1909/14 :- 4 -: ACADEMY OF MARITIME EDUCATION AND TRAINING AND SAIL ORS MARITIME ACADEMY. THE ASSESSEE, ADMITTEDLY, COLLECTED FEES FROM THE STUDENTS AND PAID TO THE SAID INSTITUTIONS FOR TRAINING AND PLACEMENT OF THE RESPECTIVE STUDENTS. THE ASSESSING OFFICER CLAIMS THAT THE FEE PAID BY THE ASSESSEE TO ACADEMY OF MARITIME EDUCATION AND TRAINING AND SAILORS MARITIME ACADEMY ARE SUBJECTED TO TDS UNDER CHAPTER XVIIB OF THE ACT. WE HAVE CAREFULLY GONE THROUGH THE ENT IRE PROVISIONS OF CHAPTER XVIIB OF THE ACT. NO PROVISION OF CHAPTER VIIB SAYS THAT THE ASSESSEE HAS TO DEDUCT TAX IN RESPECT OF SUCH PAYME NTS. EVEN OTHERWISE, THE FACT THAT THE ASSESSEE COLLECTED MO NEY ON BEHALF F THE STUDENTS AND PAID THE SAME DIRECTLY TO THE INSTITUT ES SHOWS THAT THE PAYMENT WAS DIRECTLY MADE BY THE STUDENTS. THEREFO RE, THERE IS NO QUESTION OF ANY DEDUCTION OF TAX BY THE ASSESSEE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PAYMENT MADE BY THE ASSESSEE TO ACADEMY OF MARITIME EDUCATION AND TRAINING AND SAIL ORS MARITIME ACADEMY ARE NOT SUBJECTED TO DEDUCTION OF TAX. THE REFORE, THERE IS NO QUESTION OF ANY DISALLOWANCE U/S 40(A)(IA) OF THE ACT. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE A ND THE ADDITION MADE BY THE ASSESSING OFFICER IS DELETED. ITA NO. 1909/14 :- 5 -: 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 29 TH OF MAY, 2015, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 29 TH MAY, 2015 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF