M/s.Kinship Services(India) P. Ltd, Cochin V. The ACIT(TDS), Cochin

ITA 302/COCH/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7229 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-11-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 26-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: LATHA V KUMAR
• Assessee Lawyers: R RAJA GOPALAN
• Keywords: Tax effect
• Section: 194C; 201(1); 2

Judgement Text

1 ITA NO. 302/COCH/2014 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 302/COCH/2014 (ASSESSMENT YEAR 2007-08) KINSHIP SERVICES (INDIA)(P) LTD VS ACIT(TDS) SUBRAMANIAM ROAD KOCHI W/ISLAND, KOCHI 682 003 PAN : AABCK1973G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R RAJAGOPALAN RESPONDENT BY : SMT. LATHA V KUMAR DATE OF HEARING : 27-08-2014 DATE OF PRONOUNCEMENT : 24-09-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-III, KOCHI DATED 24-03-2014 FOR THE ASSESSME NT YEAR 2007-08. 2. SHRI R RAJAGOPALAN, THE LD.COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ASSESSEE HIRED A SHIP AND PAID HIRE CHARGES. A CCORDING TO THE LD.COUNSEL, IT IS A SIMPLE CHARTER HIRE OF THE SHIP S AND NOT FOR CARRIAGE OF GOODS. THEREFORE, ACCORDING TO THE LD.COUNSEL, THE PROVISIONS OF SECTION 194C ARE NOT APPLICABLE. THE CIT(A) ALSO FOUND THA T THE PROVISIONS OF 2 ITA NO. 302/COCH/2014 SECTION 194-I ARE ALSO NOT APPLICABLE ON THE BASIS OF THE JUDGMENT OF THE BOMBAY HIGH COURT. ACCORDING TO THE LD.COUNSEL, IF SECTION 194-I IS NOT APPLICABLE SINCE SHIP CANNOT BE CONSTRUED TO BE A PLANT OR EQUIPMENT, THE PROVISIONS OF SECTION 194C CAN ALSO BE NOT MADE APPLICABLE AS THE AGREEMENT IS NOT FOR CARRIAGE OF GOODS. IT IS ONLY HIRING OF SHIP WHICH IS TO BE USED FOR THE BUSINESS OF THE ASSESSEE. THEREFOR E, ACCORDING TO THE LD.COUNSEL, THE ASSESSEE IS NOT LIABLE TO DEDUCT TA X EITHER U/S 194C OR U/S 194-I OF THE ACT. ON A QUERY FROM THE BENCH, WHEN THE CIT(A) PASSED COMMON ORDER FOR THE ASSESSMENT YEARS 2007-08 AND 2 008-09 AND THE ASSESSEE FILED THE APPEAL ONLY FOR THE ASSESSMENT Y EAR 2007-08 WHEN THE SAME ISSUE AROSE IN BOTH THE APPEALS BEFORE THE CIT (A), HOW ONLY ONE APPEAL IS MAINTAINABLE BEFORE THIS TRIBUNAL, THE LD .COUNSEL CLARIFIED THAT FOR THE ASSESSMENT YEAR 2008-09 THE ASSESSEE DEDUCTED T AX AT 2% U/S 194C OF THE ACT, THEREFORE,, THE ASSESSEE DID NOT WANT T O AGITATE THE ISSUE FOR THE ASSESSMENT YEAR 2008-09. HENCE, NO APPEAL WAS FILED FOR THE ASSESSMENT YEAR 2008-09. SINCE THE ASSESSEE HAS NOT DEDUCTED ANY TAX FOR THE ASSESSMENT YEAR 2007-08, THE ASSESSEE CHALLENGED TH E ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2007-08. THE LD.COU NSEL FURTHER CLARIFIED THAT EACH ASSESSMENT YEAR IS SEPARATE AND DISTINCT, THEREFORE, EVEN THOUGH COMMON ORDER WAS PASSED BY THE CIT(A) FOR THE ASSES SMENT YEAR 2007-08 AND 2008-09 THE ASSESSEE CAN CHALLENGE THE ORDER FO R ANY ONE OF THE ASSESSMENT YEARS ALSO. THE LD.COUNSEL FURTHER CLAR IFIED THAT FOR EARLIER 3 ITA NO. 302/COCH/2014 ASSESSMENT YEAR THE CIT(A) FOUND THAT THE ASSESSEE HAD TO DEDUCT TAX U/S 194C BY AN ORDER DATED 09-12-2012, THAT ORDER WAS A LSO NOT CHALLENGED BEFORE THE TRIBUNAL SINCE THE TAX EFFECT INVOLVED I N THAT YEAR WAS VERY MEAGRE. 3. ON THE CONTRARY, SMT. LATHA V KUMAR, THE LD.DR S UBMITTED THAT THE ASSESSEE PAID CHARTER HIRE CHARGES OF RS.12,61,18,4 20 WITHOUT DEDUCTING TAX AS PROVIDED IN SECTION 194C OF THE ACT. ACCORD ING TO THE LD.DR FOR EARLIER YEARS ALSO THE CIT(A) FOUND THAT THE ASSESS EE HAD TO DEDUCT TAX U/S 194C OF THE ACT. EVEN THOUGH THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD TO DEDUCT TAX U/S 194-I, THE CIT(A) FO UND THAT THE TAX HAD TO BE DEDUCTED U/S 194C AND NOT U/S 194-I OF THE ACT. THE FACT REMAINS IS THAT NO TAX WAS DEDUCTED, THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY TREATED THE ASSESSEE AS AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE QUES TION ARISES FOR CONSIDERATION IS WHETHER THE ASSESSEE IS LIABLE TO DEDUCT TAX U/S 194C OF THE ACT FOR PAYMENT OF CHARTER HIRE CHARGES TO THE OWNER OF THE SHIP. FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09 THE CIT(A) FOUND THAT THE ASSESSEE HAS TO DEDUCT TAX U/S 194C ON PAYMENT OF C HARTER HIRE CHARGES. THE CIT(A) ALSO FOUND THAT THE SHIP CANNOT BE CONST RUED TO BE A PLANT OR 4 ITA NO. 302/COCH/2014 MACHINERY, THEREFORE, THE PROVISIONS OF SECTION 1 94-I ARE NOT APPLICABLE. ADMITTEDLY, THE ASSESSEE HAS NOT CHALLENGED THE FIN DING IN THE COMMON ORDER PASSED BY THE CIT(A) IN RESPECT OF ASSESSMENT YEAR 2008-09. THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE FINDI NG HOLDING THAT THE ASSESSEE WAS LIABLE TO DEDUCT TAX U/S 194C OF THE A CT WAS RECORDED IN A COMMON ORDER FOR TWO ASSESSMENT YEARS, I.E. 2007-08 AND 2008-09, CAN THE ASSESSEE ACCEPT THE FINDING OF THE COMMISSIONER OF INCOME-TAX (APPEALS) FOR THE ASSESSMENT YEAR 2008-09 AND CHALL ENGE THE VERY SAME FINDING FOR THE ASSESSMENT YEAR 2007-08? THE LD.CO UNSEL FOR THE ASSESSEE MADE AN ATTEMPT TO SUPPORT HIS VIEW ON THE GROUND T HAT EACH ASSESSMENT YEAR IS SEPARATE AND DISTINCT; THEREFORE, ONE APPEA L FOR EITHER OF THE ASSESSMENT YEARS IS MAINTAINABLE. NO DOUBT, EACH A SSESSMENT YEAR IS DISTINCT AND SEPARATE. THE PRINCIPLES OF RES JUDICATA ARE ALSO UNKNOWN TO THE TAXATION PROCEEDINGS. HOWEVER, THE PUBLIC POLI CY REQUIRES CONSISTENCY IN JUDICIAL DECISIONS ON IDENTICAL SET OF FACTS. O N THE SAME SET OF FACTS, THE ASSESSEE ACCEPTS THE FINDINGS OF THE CIT(A) FOR THE ASSESSMENT YEAR 2008- 09, THEREFORE, IT CANNOT CHALLENGE THE FINDINGS OF THE CIT(A) FOR THE ASSESSMENT YEAR 2007-08 ON THE GROUND THAT EACH AS SESSMENT YEAR IS SEPARATE AND DISTINCT. IF THIS TRIBUNAL DISTURBS T HE FINDINGS OF THE CIT(A) FOR THE ASSESSMENT YEAR 2007-08 IT WILL AUTOMATICALLY R EFLECT IN THE ORDER OF THE CIT(A) FOR THE ASSESSMENT YEAR 2008-09 EVEN THOUGH THE 5 ITA NO. 302/COCH/2014 ASSESSEE HAS ACCEPTED THE FINDINGS OF THE CIT(A). THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT CONSISTENCY IS THE HALLMARK OF JUDICIAL DECISIONS ON IDENTICAL SET OF FACTS, THEREFORE, TO MAINTAIN JUDI CIAL DISCIPLINE AND PUBLIC POLICY OF CONSISTENCY IN JUDICIAL DECISIONS, THE AS SESSEE CANNOT CHALLENGE THE FINDINGS OF THE CIT(A) FOR THE ASSESSMENT YEAR 2007-08 ALONE WHEN THE CIT(A) RECORDED THE FINDINGS FOR ASSESSMENT YEARS 2 007-08 AND 2008-09 IN A COMMON ORDER. EVEN THOUGH THE POWER OF THIS T RIBUNAL TO DECIDE THE APPEAL TECHNICALLY FLOWS FROM THE PROVISIONS OF THE INCOME-TAX ACT, IN FACT, THE POWER FLOWS FROM THE CONFIDENCE AND TRUST OF TH E PEOPLE ON THE JUDICIAL INSTITUTION. THEREFORE, THE CONFIDENCE AND TRUST O F THE PEOPLE NEEDS TO BE MAINTAINED BY MAINTAINING CONSISTENCY IN THE JUDICI AL DECISIONS ON IDENTICAL SET OF FACTS. 5. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THIS APPEAL OF THE ASSESSEE AGAINST THE COMMON ORDE R PASSED BY THE CIT(A) FOR ASSESSMENT YEARS 2007-08 AND 2008-09 IS NOT MAINTAINABLE BEFORE THIS TRIBUNAL IN THE ABSENCE OF AN APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 ALSO. THEREFORE, WITHOUT G OING INTO THE MERIT OF THE APPEAL, THE APPEAL FILED BY THE ASSESSEE FOR TH E ASSESSMENT YEAR 2007-08 IS DISMISSED AS NOT MAINTAINABLE. 6 ITA NO. 302/COCH/2014 ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH SEPTEMBER, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 24 TH SEPTEMBER, 2014 PK/- COPY TO: 1. KINSHIP SERVICES (INDIA)(P) LTD, SUBRAMANIAM ROA D, W/ISLND, KOCHI 682 003 2. THE ACIT (TDS), KOCHI 3. THE COMMISSIONER OF INCOME-TAX, KOCHI 4. THE COMMISSIONER OF INCOME-TAX(A)-III, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH