ITO, Ward-5(2)(5), Ahmedabad V. Pritesh D.Shah(HUF), Ahmedabad

ITA 3403/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6326 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 08-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE, SHRI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA NOS. 3403 & 34 04/AHD/2015 (ASSESSMENT YEARS: 2006- 07 & 2011-12) I.T.O., WARD 5(2)(5), AHMEDABAD APPELLANT VS. PRITESH D SHAH (HUF), PROP: OF KASHYAP SHIPPING AGENCY, 11 KALINDI COMPLEX, OPP: OLD HIGH COURT, NAVRANGPURA, AHMEDABAD 380009 RESPONDENT PAN: AANHS6430F /BY REVENUE : SHRI SURENDRA KUMAR, CIT.D.R. SHRI MUDIT NAGPAL, SR. D.R /BY ASSESSEE : SHRI BHADRESH GANDHAKWALA, A .R. /DATE OF HEARING : 09.01.2018 /DATE OF PRONOUNCEMENT : 10.01.2018 ORDER PER S. S. GODARA, JUDICIAL MEMBER THESE TWO REVENUES APPEALS FOR ASSESSMENT YEAR 200 6-07 AND 2011-12 ARISE AGAINST THE CIT(A)-5, AHMEDABADS SEPARATE OR DERS DATED 24.09.2015 & 23.09.2015, IN CASE NO. CIT(A)-5/ITO.WD.10(4)/374/2 014-15 & CIT(A)- 5/ITO.WD.5(2)(4)/53/2014-15, REVERSING ASSESSING OF FICERS ACTION ITA NOS. 3403 & 3404/AHD/15 [ITO VS. PRITESH D SHA H (HUF)] A.YS. 2006-07 & 2011-12 - 2 - DISALLOWING/ADDING FREIGHT CHARGES, CONCOR CHARGES, WARE HOUSING CHARGES, ICD EXPENSES OF RS.5,30,07,940/-, RS.3,48,91,954/-, RS.6,46,095/- & RS..12,04,440/- IN FORMER ASSESSMENT YEAR AND CONCO R & FREIGHT CHARGES IN LATTER ASSESSMENT YEAR AMOUNTING TO RS.1,60,30,697/ - & RS.4,78,10,938/-; RESPECTIVELY; IN PROCEEDINGS U/S.143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT IN FORMER ASSESSMENT YEAR AND U/S.1 43(3) OF THE ACT IN LATTER ASSESSMENT YEAR. HEARD LEARNED DEPARTMENTAL REPRESENTATIVE. ASSESS EES WRITTEN SUBMISSION PERUSED. 2. IT IS EVIDENT AT THE OUTSET THAT THE REVENUE SEE KS TO REVIVE ASSESSING OFFICERS IDENTICAL ACTION DISALLOWING ASSESSEES A BOVE NARRATED EXPENDITURE ON ACCOUNT OF ITS FAILURE IN DEDUCTING TDS BY INVOKING SECTION 40(A)(IA) R.W.S. 194C OF THE ACT. LEARNED DEPARTMENTAL REPRESENTATIVE VE HEMENTLY CONTENDS THAT THE CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN DELE TING THE ABOVE IDENTICAL DISALLOWANCES. WE NOTICE THAT THIS IS NOT THE FIRS T INSTANCE WHEREIN THE VERY ISSUE(S) HAVE COME UP BEFORE THE TRIBUNAL. A CO-OR DINATE BENCH IN ASSESSMENT YEAR 2010-11 HAS DECLINED REVENUES IDENTICAL ARGUMENTS RAISED IN ITA NO.625/AHD/2014 DECIDED ON 03.01.2017 AS UNDER: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HA S CHALLENGED CORRECTNESS OF THE ORDER DATED 16TH DECEMBER, 2013 PASSED BY THE L D. CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX A CT, 1961 ('THE ACT' HEREINAFTER) FOR THE ASSESSMENT YEAR 2010-11, ON TH E FOLLOWING GROUNDS :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS I N DELETING THE ADDITION OF RS.3,27,35,109/-, RS.1,91,44,649/- AND RS.9,08,767/ - MADE U/S. 40(A)(IA) OF THE ACT WITHOUT CONSIDERING THE FACT THAT THE PROVISION S OF SECTION 40(A)(IA) OF THE ACT WITHOUT CONSIDERING THE FACT THAT THE PROVISION S OF SECTION 40(A)(IA) R.W.S. 194C & 1941 OF THE ACT ARE SQUARELY APPLICABLE TO T HE FACTS OF THE ASSESSEE'S CASE AND THE DISALLOWANCE HAVE CORRECTLY BEEN MADE BY THE AO. (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. (3) IT IS THEREFORE PRAYED THAT THE ORDER OF T HE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER BE RESTO RED TO THE ABOVE EXTENT.' ITA NOS. 3403 & 3404/AHD/15 [ITO VS. PRITESH D SHA H (HUF)] A.YS. 2006-07 & 2011-12 - 3 - 2. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE IS SUE IN APPEAL IS ROW COVERED, IN FAVOUR OF THE ASSESSEE, BY A CO-ORDINAT E BENCH'S DECISION IN ASSESSEE'S OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT Y EAR. VIDE THIS DECISION DATED (14.10,2013, THE TRIBUNAL HAS, INTER ALIA, OBSERVED AS FOLLOWS :- '5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PE RUSED THE ORDER OF THE A.O. AND CIT(A) AND COPIES OF VARIOUS DOCUMENTS AND DETAILS FILED IN THE COMPILATION BEFORE US. WE FIND THAT THE ASSESSEE IS ONLY A CLEARING & FORWARDING AGENT AND HAS CHARGED ITS SERVICE CHARGE S KNOWN AS AGENCY CHARGES FROM ITS CLIENTS WHOSE GOODS ARE EXPORTED T HROUGH VARIOUS PORTS MAINLY IN GUJARAT & MAHARASHTRA. THE ASSESSEE HAS R ECEIVED THE RAILWAY FREIGHT, SHIPPING FREIGHT, /CD CHARGES ETC. FROM IT S CLIENTS BY WAY OF REIMBURSEMENT OF EXPENSES. ACCORDINGLY, THE ASSESSE E IS MERELY A FACILITATOR IN THE EXPORT BUSINESS OF ITS CLIENTS AND HAS RECEIVED THE REIMBURSEMENT OF EXPENSES INCURRED AND SERVICE CHARGES IN THE NAME O F AGENCY CHARGES FROM ITS CLIENTS. THESE FACTS COULD NOT BE CONTROVERTED ON B EHALF OF THE REVENUE BEFORE US. WE FIND THAT THE RECEIPTS WERE ISSUED BY THE VA RIOUS PARTIES IN THE NAME OF CLIENTS OF THE ASSESSEE AND NOT IN THE NAME OF THE ASSESSEE. ON THE PERUSAL OF THE COPY OF THE AUDITED ACCOUNTS, IT SHOWS THAT THE ASSESSEE HAS RECEIVED AND CREDITED TO ITS P&L ACCOUNT AGENCY CHARGES APART FR OM THE REIMBURSEMENT OF EXPENSES INCURRED ON BEHALF OF ITS CLIENTS. WE FIND THAT THE ASSESSEE FACILITATES TO AND FRO MOVEMENT OF CLIENT'S GOODS BOTH IN LAND AND OVERSEAS, USING ROAD, RAIL, AIR AND SEA ROUTES INCLUDING TEMPORARY STORAG E OF THE GOODS IN CUSTOM BOUNDING WAREHOUSES FOR LEGAL AND PROCEDURAL PURPOS ES ETC. FOR THE APPLICABILITY OF PROVISION OF SECTION 194C & 1941, THE RELATIONSHIP OF CONTRACTOR AND PAYEE PURSUANT TO CONTRACT BETWEEN T HE PARTIES IS ESSENTIAL. IN THE CASE BEFORE US, NO SUCH RELATIONSHIP HAS BEEN F OUND. THE CIT(A) HAS GIVEN THE FINDING THAT THE CLIENTS OF THE ASSESSEE ARE RE IMBURSING AMOUNT OF MONIES PAID BY THE ASSESSEE TO SUCH AGENCIES ALONG WITH TH E ASSESSEE'S COMMISSION OR HANDLING CHARGES. THE CIT(A) HAS REFERRED TO NUMBER OF DECISIONS WHEREIN THE HON'BLE COURTS HELD THAT TDS PROVISIONS ARE NOT ATT RACTED IN CASES INVOLVING REIMBURSEMENT OF EXPENSES. IN THESE FACTS OF THE CA SE, WE FIND THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN HOLDING THAT THE ADDITION ON ACCOUNT OF PAYMENTS, MADE TO VARIOUS PARTIES ON BEHALF OF ITS CLIENTS BY THE ASSESSEE COULD NOT BE SUSTAINED AND DESERVES TO BE DELETED. ACCORD INGLY, THE ORDER OF THE CIT(A) IS CONFIRMED AND GROUND OF THE REVENUE'S APP EAL IS DISMISSED.' 3. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO-ORDINATE BENCH. 4. RESPECTFULLY FOLLOWING THE TRIBUNALS DECISION D ATED 04.10.2013, IN ASSESSEES OWN CASE FOR THE IMMEDIATELY PRECEDING A SSESSMENT YEAR, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE GROUNDS RAISED BY THE REVENUE. 3. LEARNED DEPARTMENTAL REPRESENTATIVE IS FAIR ENOU GH IN NOT POINTING OUT ANY DISTINCTION ON FACTS AS WELL AS THE ISSUES INVOLVED HEREIN. WE THUS ADOPT JUDICIAL ITA NOS. 3403 & 3404/AHD/15 [ITO VS. PRITESH D SHA H (HUF)] A.YS. 2006-07 & 2011-12 - 4 - CONSISTENCY TO AFFIRM LEARNED CIT(A)S IDENTICAL FI NDINGS IN BOTH THE IMPUGNED ASSESSMENT YEARS. 4. THE REVENUES INSTANT TWO APPEALS ARE ACCORDINGL Y DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 10 TH DAY OF JANUARY, 2018.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER AHMEDABAD: DATED 10/01/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0