ACIT CIR 12(3), MUMBAI V. SUKHANI ENTERPRISES, MUMBAI

ITA 3035/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100562 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 30-07-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 19-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VINITA J MENON
• Assessee Lawyers: NIKUJ GADA

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI A.D. JAIN, JM AND SHRI RAJENDRA, AM .. , , ./ I.T.A. NO. 3035 /MUM/2013 ( / ASSESSMENT YEAR : 2009-10 ACIT CIRCLE 12(3), R. NO. 137, IST FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020. / VS. M/S SUKHANI ENTERPRISES, 401-402, TULSIANI CHAMBERS, FREE PRESS JOURNAL ROAD, MUMBAI - 400021. ./ PAN : AAAFS3880Q ( / APPELLANT ) .. ( ! / RESPONDENT ) A PPELLANT BY MS. VINITA J. MENON R E SPONDENT BY : SHRI NIKUJ GADA ' # $ % & ' / DATE OF HEARING : 30-07-2015 ()*+ % & ' / DATE OF PRONOUNCEMENT : 07-08-2015 [ 3 / O R D E R PER A.D. JAIN, J.M . : .. , THIS IS DEPARTMENTS APPEAL FOR A.Y. 2009-10, CHALL ENGING THE ACTION OF THE LD. CIT(A) -23, MUMBAI IN DELETING THE ADDITION OF RS. 55,12,920/- MADE BY THE A.O. U/S 40(A)(IA) OF THE INCOME TAX ACT, 19 61. 2. THE ISSUE UNDER CONSIDERATION IS THAT THE ASSESS EE IS A FIRM TRADING, IMPORTING AND EXPORTING ENGINEERING GOODS/AUTO PART S, ETC., ON COMMISSION BASIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTED THAT THE ASSESSEE HAD NOT DEDUCTED TDS ON THE BROKERAGE/COMM ISSION PAID TO A ITA 3035/M/13 2 FOREIGN BROKER, M/S EL TABALDI INTERNATIONAL CO. LT D. THE A.O., ACCORDINGLY, ISSUED SHOW CAUSE NOTICE ASKING AS TO WHY DISALLOWA NCE U/S 40(A)(IA) OF THE ACT SHOULD NOT BE MADE FOR WITHHOLDING THE TAX ON T HE BROKERAGE/COMMISSION PAID TO THE FOREIGN BROKER, M/S EL TABALDI INTERNAT IONAL CO. LTD. HOWEVER, THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPONSE TO THE A.O.S NOTICE WAS NOT ACCEPTABLE TO THE A.O. AND HE DISALLOWED THE PAYMEN T MADE TO THE FOREIGN PARTY AMOUNTING TO RS. 55,12,920/- U/S 40(A(IA) OF THE ACT. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND THE LD . CIT(A), BY RELYING ON THE TRIBUNAL DECISION IN THE ASSESSEES OWN CASE FOR A. Y. 2007-08 IN ITA NO. 1330/MUM/2011 DATED 30-10-2012, ALLOWED THE CLAIM O F THE ASSESSEE. AGGRIEVED BY THE DECISION OF THE LD. CIT(A), THE RE VENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE REI TERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. THE LD. D.R. CO ULD NOT CONTROVERT THE SAME, BY BRINGING ANY NEW MATERIAL. 4. HAVING HEARD THE RIVAL CONTENTIONS, WE FIND THAT AN IDENTICAL ISSUE CAME UP BEFORE THE TRIBUNAL IN THE ASSESSEES OWN CASE F OR A.Y. 2007-08 AND THE TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE. THE TRI BUNAL OBSERVED THAT THE PAYMENT IN QUESTION WAS IN THE NATURE OF COMMISSION TO THE SELLING AGENT AND, THEREFORE, NOT LIABLE TO TAX IN INDIA IN THE H ANDS OF THE RECIPIENT AND THAT NO TAX WAS REQUIRED TO BE DEDUCTED AT SOURCE U/S 40 (A)(IA) OF THE ACT. THE LD. CIT(A) IS QUITE RIGHT IN DISMISSING THE APPEAL OF T HE REVENUE BY FOLLOWING THE TRIBUNAL ORDER DATED 30-10-2012 (SUPRA), WHICH HAS NOT BEEN SHOWN TO BE REVERSED/CANCELLED/SET ASIDE, OR EVEN STAYED ON APP EAL. ACCORDINGLY, THE ACTION OF THE LD. CIT(A) IN DELETING THIS DISALLOWA NCE IS UPHELD. ITA 3035/M/13 3 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH AUGUST, 2015. 3 % ()*+ ' 45 6 7 07-08-2015 ) % 8$ SD/- SD/- (RAJENDRA) (A.D. JAIN ) ACCOUNTANT MEMBER /J UDICIAL MEMBER 4 ' D$ MUMBAI ; 6 DATED 07-08-2015 [ #.../ R.K. R.K. R.K. R.K. , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. ' E& () / THE CIT(A) -23, MUMBAI 4. ' E& / CIT-12 , MUMBAI 5. H#I 8 &JK , ' JK+ , 4 ' D$ / DR, ITAT, MUMBAI E BENCH 6. 8 L M $ / GUARD FILE. ! ( / BY ORDER, ! H& & //TRUE COPY// )/(* + ( DY./ASSTT. REGISTRAR) , 4 ' D$ / ITAT, MUMBAI