ITO (TDS) 2(3), MUMBAI V. MARINE CONTIANER SERVICES (I) P.LTD, MUMBAI

ITA 2484/MUM/2014

• Counselvise Citation: 248419914 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: REEPAL G TRALSHAWALA
• Keywords: Non-deduction of tax
• Section: 201(1)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI- B,BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMB ER & SHAKTIJIT DEY,JUDICIAL MEMBER /.ITA NO.2484 & 85/MUM/2014, /ASSESSMENT YEAR-2004-05 AND 05-06 ITO-(TDS)2(3) ROOM NO.708, 7 TH FLOOR SMT. K.G. MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI-400 002. VS MARINE CONTAINER SERVICES(I) P.LTD. 71, WORLD TRADE CENTRE G.D. SOMANI MARG, CUFFE PARADE MUMBAI-400 005. PAN:AAACM 3712 E ( / APPELLANT) ( / RESPONDENT) /ASSESSEE BY :SHRI REEPAL G.TRALSHAWALA / REVENUE BY :SHRI MAURYA PRATAP / DATE OF HEARING : 06 - 10 -2015 / DATE OF PRONOUNCEMENT : 09 -10-2015 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER,DATED 17.01.2014,OF CIT(A)-13 ,MUMBAI,THE ASSESSING OFFICER(AO) HAS FILED THE PRESENT APPEALS FOR THE ABOVE MENTIONED T WO ASSESSMENT YEARS.(AY.S.). 2. ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF PROV IDING CONTAINER HANDLING SERVICES TO ITS CLIENTS.A SURVEY ACTION WAS CARRIED OUT AT THE BUSI NESS PREMISES OF THE ASSESSEE ON 11.03.2005 AND STATEMENTS ON OATH WERE RECORDED OF THE OFFICIA LS OF THE COMPANY.DURING THE COURSE OF SURVEY IT WAS OBSERVED THAT THE ASSESSEE HAD MADE P AYMENT OF RS.2.48 CRORES TO NHAVA SHEVA INTERNATIONAL CONTAINER TERMINAL PVT. LTD.(NSICTL), THAT IT HAD DEDUCTED TAX AT SOURCE AT THE RATE OF 2% U/.194C OF THE ACT.THE OFFICER WAS OF THE OPI NION THAT IT SHOULD HAVE DEDUCTED TAX AS PER THE PROVISIONS OF SECTION 194J OF THE ACT.A QUESTIO N IN THAT REGARD WAS ASKED AFTER CONSIDERING THE REPLIES OF THE ASSESSEE THE ITO-(TDS)-II(3),MUM BAI PASSED AN ORDER ON 28.03.2011 U/S. 201 (1)/201(1A) OF THE ACT FOR BOTH THE AY.S.HE HELD TH AT NSICTL WAS RENDERING TECHNICAL SERVICES TO ITS CLIENTS THAT CONTAINER HANDLING WAS A SPECIA LISED AND TECHNICAL SERVICE,THAT THE SERVICES WERE PROVIDED WITH THE HELP OF MACHINES AND TECHNICAL MA NPOWER,THAT CONTAINER HANDLING CHARGES TO NSICTL WERE SUBJECT TO TDS U/S.194J OF THE ACT.HE H ELD THE ASSESSEE COMPANY DEEMED TO BE AN ASSESSEE IN DEFAULT FOR ITS FAILURE TO DEDUCT TAX A T SOURCE ON RS.2.84 CRORES @ 5.5%.HE WORKED OUT THE DEFAULT OF RS.13.64 LACS U/S. 201(1) OF THE ACT AND CALCULATED INTEREST U/S. 201(1A)OF THE ACT AT RS.11,32,120/- FOR THE PERIOD 1.4.2004 TO 2 8.2.2011, FOR THE AY 04-05.FOR THE AY 05-06 THE DEFAULT U/S.201 WAS CALCULATED AT RS.13.14 LACS AND INTEREST WAS CALCULATED AT RS.9,46,344/- FOR THE PERIOD 1.4.2005 TO 28.2.2011. 3. AGGRIEVED BY THE ORDERS OF THE ITO-TDS,THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM,IT WAS ARGUED THAT IT WAS AN AGENT FOR FOREIGN SHIPPING COMPANY WORKING AT INDIAN PORTS,THAT IT WAS PROVIDING CONTA INER HANDLING SERVICES TO THE CLIENTS /SHIPPERS, THAT IT WAS WORKING ON BEHALF OF FOREIGN PRINCIPALS , THAT THE AMOUNTS PAID TO NSICTL WERE ON 2484 & 85/14 MARINE CONTAINER S. (I) P.LTD 2 BEHALF OF THE PRINCIPALS AND THAT THE TDS @2% HAD B EEN DEDUCTED THEREFROM ,THAT EXPENSES WERE NOT AT ALL THE EXPENSE OF THE ASSESSEE-COMPANY,THAT THE SERVICES RENDERED BY NSICTL WERE NOT TECHNICAL SERVICES.AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE AND THE ORDER OF THE ITO-TDS,THE FAA RELIED UPON THE CASE OF MERCHANT SH IPPING SERVICES(ITA 192/2010- AY.04-05,DATED 24.11.2010).FOLLOWING THE ABOVE DECI SION,HE HELD THAT AMOUNT PAID TO NSICTL WOULD NOT FALL U/S. 194J OF THE ACT AND ALLO WED THE APPEALS FILED BY THE ASSESSEE FOR BOTH THE YEARS. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR)SUPPORTED THE ORDER OF THE AO.AUTHORISED REPRESENTATIVE(AR)RELIED UPON THE CASE OF MERCHANT SHIPPING SERVICES(SUPRA).WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFO RE US.WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE ORDER OF MERCHANT SHIPPING SERVICES( SUPRA).IN THAT MATTER THE TRIBUNAL HAS HELD AS UNDER: 21.IN VIEW OF THE FOREGOING DISCUSSION WE HOLD THA T THERE WAS NO LIABILITY ON THE ASSESSEE TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE TO CAPI TAL NSICT WITHIN THE MEANING OF SECTION 194J AND THE LD. CIT(A) WAS JUSTIFIED IN HOLDING SO. RESPECTFULLY FOLLOWING THE SAME,WE ARE OF THE OPINI ON THAT THE ORDER OF THE FAA HAD TO BE ENDORSED.SO,CONFIRMING HIS ORDER,WE DECIDE THE EFFE CTIVE GROUNDS OF APPEAL FOR BOTH THE YEARS AGAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO FOR BOTH THE AY.S.STAND DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH OCTOBER,2015. 9, ,201 5 SD/- SD/- ( / SHAKTIJIT DEY) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE:09.10.2015 . . . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR B BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.