ACIT 31(1), MUMBAI V. AACASH EXPORTS, MUMBAI

ITA 4269/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7951 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2017
• Appeal Filed By: Department
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 09-07-2015
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: NEHA BARVE
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI D.T. GARASIA, JM AND SHRI RAMIT KOCHAR , AM I.T.A. NO. 4269/MUM/2015 ASSESSMENT YEAR: 2011 - 12 ACIT - 31(1) ERSTWHILE ACIT/DCIT - 24(3) R.NO. 701 C - 11, 7 TH FLOOR B.K.C., BANDRA (E), MUMBAI - 400051 VS. M/S AACASH EXPORTS, B - 14, KRISHNA LEELA CO - OP HSG. SOCIETY, BANGUR NAGAR, GOREGAON WEST, MUMBAI - 400062 PAN: AA EFA7369J (APPELLANT) : (RESPONDENT) APPELLANT BY : SHRI RAJESH KUMAR YADAV RESPONDENT BY : MS. NEHA BARVE DATE OF HEARING : 21 /03/2017 DATE OF PRONOUNCEMENT : 23 /03/2017 O R D E R PER D. T. GARASIA, JM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 4 2 MUMBAI, DATED 27/04 /2015 ARISING OUT OF ORDER OF DCIT - 24(3) MUMBAI DATED 28/02/2014 PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE FOLLOWING GROUNDS ARE READS AS UNDER: - 2 AACASH EXPORTS ITA NO. 4269/M/2015 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L D. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE U/S 40(A)(IA) OF RS 66,83,255/ - IGNORING THE FINDINGS UNEARTHED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED I N DELETING THE DISALLOWANCE MADE U/S.40(A)(IA) OF RS.66,83,255/ - IGNORING THE FACT THE ASSESSEE HAD FAILED TO PROVIDE ANY DOCUMENTARY EVIDENCE TO SHOW THAT THE PAYMENTS MADE TO NINE PARTIES ARE COVERED BY CIRCULAR NO.723 OF THE CBDT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE MADE U/S.40(A)(IA) OF RS.66,83,255/ - IGNORING THE FACT THE ASSESSEE HAD FAILED TO PROVIDE WHETHER THE NINE PARTIES ARE ACTING AS AGENTS ON BEHAL F OF NON - RESIDENT SHIPPING OWNER OR NOT'. 3. THE SHORT FACTS OF THE CASE ARE AS UNDER: - THE ASSESSEE HAS FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.62,41,789/ - ON 28/09/2011. THE ASSESSEE IS ENGAGED INTO THE BUSINESS OF EXPORT OF CHEMICALS. TH E AO HAS COMPLETED THE ASSESSMENT AND MADE ADDITION OF RS.66,83,225/ - UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT, 1961 COMPRISING OF RS.63,46,831/ - TOWARDS OCEAN FREIGHT AND RS.3,36,424/ - REIMBURSEMENT OF EXPENSES. 3 AACASH EXPORTS ITA NO. 4269/M/2015 4. DURING THE COURSE OF HEARI NG , THE LD. AR HAS REQUESTED FOR ADJOURNMENT MS. NEHA B ARVE WAS PRESENT AND WE DECLINED TO GIVE THE ADJOURNMENT. THE LD. REPRESENTATIVE SUBMITTED THAT THIS ISSUE IS COVERED BY THE ASSESSEES OWN CASE IN AY 2009 - 10 AND WHEREIN THE REVENUE APPEAL WAS DISMISSED. 5. THE LD. DR HAS NO OBJECTION IF THE MATTER IS DECIDED ACCORDINGLY. 6. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PARTIES. LOOKING TO FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE ASSESSEES OWN CASE WHEREIN THE TRIBUNAL DISMISSED THE DEPARTMENTAL APPEAL BY OBSERVING AS UNDER - 4 .1 CONSIDERING THE FACTS OF THE CASE, OCEAN FREIGHT CHARGES, AIR FREIGHT CHARGES AND IN LAND CHARGES ARE COVERED BY THE CIRCULAR OF CBDT BEARING NO. 723 DATED 10/09/1995, ACCORDING TO WHICH NO TDS IS TO BE DEDUCTED ON SUCH PAYMENTS. THE SAME VIEW HAS BEEN REITERATED BY THE TRIBUNAL IN THE CASE OF ITO VS. FREIGHT SYSTEM (INDIA)(P) LTD. [2006 (6) SOT 473 (DEL)] WHEREIN IT HAS BEEN HELD THAT PAYMENT OF OCEAN FREIGHT IS NOT LIABLE FOR TAX DEDUCTION AT SOURCE U/S 194(C) IN VIEW OF PROVISIONS OF SECTION 172. THE SAME IS THE CASE WITH THE INLAND CHARGES WHICH IS COVERED UNDER SUBSECTION 8 OF SECTION 172. THE TRIBUNAL IN THE CASE OF DCIT VS. HASMUKH J. PATEL [2012 (49) SOT 197 (AHD)] HAS HELD THAT THE PAYMENT MADE TO SHIPPING AGENTS OF NON RESIDENTS IS NOTING B UT REIMBURSEMENT OF CHARGE WHICH HAS BEEN CLARIFIED BY THE CBDT CIRCULAR NO. 723 (SUPRA) WHICH STATES THAT THE PROVISIONS OF SECTION 172 WOULD APPLY IN SUCH CASES AND NO DEDUCTION OF TAXES REQUIED AS PER SECTION 194(C). SOME OF THE OTHER ADDITIONS WERE DEL ETED BY THE LD. CIT(A) ON THE REASON THAT THE PAYMENTS WERE BELOW RS.20,000/ - AND HENCE THE ASSESSEE WAS NOT LIABLE TO DEDUCT TDS. SINCE THE LD. CIT(A) HAS CORRECTLY APPRECIATED THE FACTS AND POSITION OF LAW IN DELETING THE ADDITIONS MADE BY THE AO, WE DO NOT FIND ANY INFIRMITY IN THE SAID ORDER OF THE LD. CIT(A). 4.2 ON THE ISSUE RAISED BY THE REVENUE THAT THE LD. CIT(A) HAS ADMITTED ADDITIONAL EVIDENCE IN CONTRAVENTION OF THE RULE 46A OF THE INCOME - TAX RULES, WE ARE NOT INCLINED TO ACCEPT THE SAID CONTENT ION AS PER LD. DR COULD NOT SPECIFICALLY POINT OUT THE 4 AACASH EXPORTS ITA NO. 4269/M/2015 ADDITIONAL EVIDENCES RELIED BY THE LD. CIT(A) AS AGAINST THE CLAIM OF THE LD. AR THAT ALL THE DOCUMENTS PRODUCED BEFORE THE LD. CIT(A) HAVE BEEN MADE AVAILABLE BEFORE THE AO DURING THE ASSESSMENT PROCE EDINGS. IN VIEW OF THAT MATTER, WE UPHOLD THE ORDER OF THE LD. CIT(A). 7. WE RESPECTFULLY FOLLOWING THE SAME WE DISMISSED THE DEPARTMENTAL APPEAL. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMISSED. JUDGMENT PRONOUNCED IN THE OPEN COURT ON 23 RD MA RCH 2017. SD/ - SD/ - (RAMIT KOCHAR) ACCOUNTANT MEMBER (D.T. GARASIA) JUDICIAL MEMBER MUMBAI, DATE: 23 RD MARCH, 2017 *RAHUL SHARMA* COPY TO: 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, A BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI