Freshtrop Fruits Ltd., Ahmedabad V. The Dy. Commissioner of Income Tax, Circle-2(1)(1), Ahmedabad

ITA 2499/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7998 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2013-2014
• Appeal Filed On: 04-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA
• Keywords: Services rendered outside India

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA. NO: 2499/AHD/2016 (ASSESSMENT YEAR: 2013-14) FRESHTROP FRUITS LTD. A/603 SAPATH-IV OPP. KARNAVATI CLUB S.G. HIGHWAY AHMEDABAD- 380015 V/S DCIT, CIRCLE-2(1)(1), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACF 2885P APPELLANT BY : SHRI S. N. DIVATIA, AR RESPONDENT BY : SHRI KEYUR PATEL, SR. D.R. ( )/ ORDER DATE OF HEARING : 13 -04-201 8 DATE OF PRONOUNCEMENT : 29 -06-2018 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-2, AHMEDABAD DATED 06.09.2016 PERTAINING TO A.Y. 2013- 14 AND FOLLOWING GROUNDS HAVE BEEN TAKEN: ITA NO. 2499 /AHD/2016 . A.Y. 2013-14 2 1.1 THE ORDER PASSED U/S.250 ON 6-9-2016 FOR A.Y .2013-14 BY CIT(A)-2, ABAD UPHOLDING THE DISALLOWANCE OF EXPORT SALES C OMMISSION OF RS. 2,36,79,5367- PAID TO FOREIGN AGENTS U/S 40(A)(I) R.W.S. 195 OF T HE ACT MADE BY AO IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NAT URAL JUSTICE. 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW A ND OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENC E PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGNED ADDITION. 2.1 THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW AN D ON FACTS IN CONFIRMING DISALLOWANCE OF EXPORT SALES COMMISSION OF RS. 2,36 ,79,536/- PAID TO FOREIGN AGENTS U/S 40(A)(I) R.W.S. 195 OF THE ACT. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE C ASE AS WELL AS IN LAW, THE LD.GIT(A) OUGHT NOT TO HAVE UPHELD THE DISALLOWANCE OF EXPORT SALES COMMISSION OF RS. 2,36,79,536/- PAID TO FOREIGN AGENTS U/S 40(A)( I) R.W.S. 195 OF THE ACT 3.1 THE LD. CIT(A) HAS ERRED IN UPHOLDING THE IM PUGNED DISALLOWANCE ON THE GROUNDS OF FAILURE TO PROVE THE PLACE OF BUSINESS O UTSIDE INDIA AND DETAILS OF SERVICES RENDERED OUTSIDE INDIA ETC. THOUGH THE SAME WERE NO T DISPUTED/RAISED BY AO NOR THE APPELLANT WAS CALLED UPON TO PRODUCE BY CIT(A). IT IS, THEREFORE, PRAYED THAT THE DISALLOWANCE O F EXPORT SALES COMMISSION OF RS. 2,36,79,536/- UPHELD BY THE CIT(A) MAY KINDLY BE DE LETED. 2. BRIEF FACTS OF THE CASE ARE THAT APPELLANT IS A CLO SELY HELD COMPANY ENGAGED IN THE BUSINESS OF PROCESSING, PACKING AND EXPORT OF F RESH FRUITS, VEGETABLES, JUICE ETC. IT HAS FILED ITS RETURN OF INCOME FOR A.Y. 201 3-14 ON 27.09.2013 DECLARING TOTAL INCOME OF RS. NIL. 3. DURING THE COURSE OF ASSTT. PROCEEDINGS, THE AO NOT ICED THAT THE APPELLANT HAD MADE PAYMENT OF COMMISSION OF RS.2,36,79,36/- ON EX PORT SALES WITHOUT ITA NO. 2499 /AHD/2016 . A.Y. 2013-14 3 MAKING TDS. THE APPELLANT FURNISHED A DETAILED REPL Y VIDE LETTER DATED 19.11.2015. HOWEVER, THE AO REJECTED THE SAID EXPLA NATION RELYING MAINLY ON CBDT CIRCULAR NO.7/2009 DATED 22.10.2009 AND FURTHE R OBSERVED THAT DUTY WAS CAST UPON THE ASSESSEE TO MAKE TDS BEFORE MAKIN G PAYMENT TO NON- RESIDENT. HENCE, THE DISALLOWANCE OF RS.2,36,79,536 /- WAS MADE. 4. AGAINST THE SAID DISALLOWANCE, ASSESSEE PREFERRED F IRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO DISMISSED THE APPEAL OF THE ASSE SSEE ON THE GROUND THAT APPELLANT DID NOT PROVIDE ANY EVIDENCES OF SERVICES RENDERED BY THE FOREIGN AGENTS TO WHOM COMMISSION WAS PAID. THE APPELLANT W AS DUTY BOUND TO PROVIDE ALL THE DETAILS AND EVIDENCES IN SUPPORT OF PAYMENT OF COMMISSION TO THE AGENTS AND ALSO TO PROVE THAT THE SAME WAS GIVE N FOR THE BUSINESS PURPOSE. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IN THE IMPUGNED ORDER. IN SUPPORT OF ITS CONTENTION, LD. A.R. FILED VOLUMINOU S PAPER BOOK BUT MOST OF THE DETAILS WERE NOT FILED BEFORE THE LOWER AUTHORITIES AND APPELLANT HAS BEEN FAILED TO PROVIDE ANY DETAIL AND EVIDENCES TO DEMONSTRATE THAT THE FOREIGN AGENT DID NOT HAVE ANY BUSINESS CONNECTION OR PLACE OF BUSINE SS OF INDIA. APART FROM, THIS APPELLANT HAS ALSO TOTALLY FAILED TO PROVIDE D ETAILS AND EVIDENCES IN SUPPORT OF COMMISSION, PAYMENTS MADE BY THE APPELLANT OUTSI DE INDIA IN FOREIGN CURRENCY THROUGH BANKING CHANNELS AND NO CONFIRMATI ON AND DEBIT NOTES OF THE FOREIGN AGENT IN THIS REGARD WERE SUBMITTED BEFORE THE LOWER AUTHORITIES. NOW IT IS IMPERATIVE DUTY OF THE APPELLANT TO PROVE ITS CA SE BEYOND ANY REASONABLE DOUBT. 6. ON ACCOUNT OF FOREGOING DISCUSSION, WE SET ASIDE TH E ORDER OF THE LD. CIT(A) AND REMAND THIS MATTER BACK TO THE FILE OF THE A.O. TO DECIDE A MATTER AFRESH ITA NO. 2499 /AHD/2016 . A.Y. 2013-14 4 AND APPELLANT IS ALSO DIRECTED TO CO-OPERATE WITH T HE LD. A.O. AND PROVIDE EACH AND EVERY DETAIL PERTAINING TO HIS CASE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 29 - 06- 2018 SD/- SD/- (PRAMOD KUMAR) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 29/06/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD