Cherukuri Raghu Kiran, Chimakurthy V. The Assistant Commissioner of Income Tax, Circle-2(1), , Guntur

ITA 445/VIZ/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6801 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 27-08-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Keywords: Additional evidence; TDS; Set aside
• Section: 40(a)(ia); 194C; 195

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER& SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ I.T. A.NO. 445 /VIZ/201 8 ( / A SSESSMENT Y EAR : 20 09 - 1 0 ) SRI CHERUKURI RAGHU KIRAN D.NO. 7 - 320, MAIN ROAD CHIMAKURTHY PRAKASAM DIST. [PAN : ACZPK6211E ] ( / APPELLANT) VS. ASST.COMMISSIONER OF INCOME TAX CIRCLE - 2(1) GUNTUR ( / RESPONDENT) / APPELLANT BY : SHRI C.SUBRAHMANYAM , AR / RESPONDENT BY : S HRI B.RAMA KRISHNA , DR / DATE OF HEARING : 0 4 .0 2 .2020 / DATE OF PRONOUNCEMENT : 07 .0 2 . 20 20 / O R D E R P ER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] IN APPEAL NO.402/11 - 12 DATED 18.06.2018 FOR THE ASSESSMENT YEAR (A.Y.)2009 - 10. 2. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE ADDITION MADE BY THE ASSESSING OFFICER (AO) U/S 40(A)(IA) OF THE ACT IN RESPECT OF FREIGHT CHARGES 2 I.T.A. NO. 445 /VIZ/201 8 , A.Y.20 09 - 1 0 SRI CHERUKURI RAGHU KIRAN, PRAKASAM PAID BY THE ASSESSEE. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO) FOUND THAT THE ASSESSEE HAS NOT DEDUCTED THE TDS ON A SUM OF RS.13,75,677/ - INCURRED TOWARDS OCEAN FREIGHT. THEREFORE, THE AO DISALLOWED THE ABOVE EXPEND ITURE U/S 40(A)(IA) OF THE ACT. THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND CONTENDED THAT THE HE HAS PAID THE OCEAN FREIGHT CHARGES TO THE AGENTS OF NONRESIDENT SHIP OWNERS , T HEREFORE, ARGUED THAT AS PER CIRCULAR 723 OF CBDT DATED 19.09.1995, THE ASSESSEE IS NOT OBLIGED TO DEDUCT THE TDS U/S 194C AND 195 OF THE ACT AND ACCORDINGLY FILED THE COPIES OF INVOICES OF A.S.SHIPPING AGENCIES PVT. LTD., GEN SHIPPING PACIFIC LINE PTE LTD., ETC. HOWEVER, SINCE, THE SAID DOCUMENTS WERE NOT FURNISHED BEFORE T HE AO AT THE TIME OF ASSESSMENT PROCEEDINGS, THE LD.CIT(A) REJECTED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE AND DISMISSED THE APPEAL OF THE ASSESSEE. 3. AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THIS TRIBUNAL. DURING THE APPEAL HEARING, THE LD .AR ARGUED THAT THE LD.CIT(A) OUGHT TO HAVE ADMITTED THE ADDITIONAL EVIDENCE , SINCE , CIRCULAR NO.723 DATED 19.09.1995 EXEMPT THE ASSESSEE FROM DEDUCTION OF TAX AT SOURCE ON PAYMENTS MADE TO SHIPPING AGENTS OF NONRESIDENT SHIP OWNERS AND THE ASSESSMENTS AR E TO BE MA D E UNDER SECTION 172 OF THE ACT. THE LD.AR FURTHER SUBMITTED THAT THERE 3 I.T.A. NO. 445 /VIZ/201 8 , A.Y.20 09 - 1 0 SRI CHERUKURI RAGHU KIRAN, PRAKASAM WAS NO OCCASION FOR THE ASSESSEE TO SUBMIT THE EVIDENCE , SINCE , THE AO HAS NEVER ASKED FOR THE SAME. THEREFORE, REQUESTED TO DELETE THE ADDITION AND SET ASIDE THE ORDER OF THE LD.CIT(A). 4. ON THE OTHER HAND, THE LD.DR STRONGLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. AS PER PARA NO.2 OF THE ASSESSMENT ORDER, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE THE AO AND FURNISHED THE I NFORMATION CALLED FOR. THERE WAS NO INDICATION FROM THE ASSESSMENT ORDER THAT THE ASSESSEE FAILED TO FURNISH ANY OF THE INFORMATION CALLED FOR BY THE AO. THE AO MADE THE ADDITION FOR NON DEDUCTIO N OF TAX AT SOURCE WITHOUT EXAMINING THE APPLICABILITY OF TDS PROVISIONS IN THE CASE OF OCEAN FREIGHT. AS PER CIRCULAR NO.723 OF CBDT, THERE IS NO REQUIREMENT OF DEDUCTION OF TA X AT SOURCE IN CASE OF PAYMENTS MADE TO SHIPPING AGENTS FOR CARRIAGE OF PAS SENGERS, SHIPPED AT A PORT IN INDIA SINCE, THE SHIPPING AGENTS STEPS IN TO THE S H OES OF NONRESIDENT SHIP OWNERS . THEREFORE, WE REMIT THE MATTER BACK TO THE FILE OF THE AO WITH A DIRECTION T O ADMIT THE ADDITIONAL EVIDENCE AND EXAMINE THE ISSUE OF DEDUCTIBILITY OF TAX ON THE PAYMENTS MADE TO THE SHIPPING AGENTS U/S 194C / 195 OR OTHERWISE IN THE LIGHT OF CIRCULAR NO.723 4 I.T.A. NO. 445 /VIZ/201 8 , A.Y.20 09 - 1 0 SRI CHERUKURI RAGHU KIRAN, PRAKASAM (SUPRA) AND DECIDE THE ISSUE AFRESH AFTER GIVING OPPORTUNITY TO THE ASSESSEE. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSE. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY , 2020. S D/ - S D/ - ( . ) ( . . ) (V. DURGA RAO) ( D.S. SUNDER SINGH ) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM /DATED : 07 . 0 2 .20 20 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO: - 1. / THE ASSESSEE SRI CHERUKURI RAGHU KIRAN , D.NO. 7 - 320, MAIN ROAD, CHIMAKURTHY, PRAKASAM DIST. 2 . / THE REVENUE ASST.COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), GUNTUR 3. THE PR.COMMISSIONER OF INCOME TAX, GUNTUR 4. THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , GUNTUR 5 . , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM