The ACIT, Alappuzha V. M/s. Premier Marine Foods, Alappuzha

ITA 509/COCH/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3863 (ITAT-COCHIN)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 08-09-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 28-10-2015
• Court: TRIBUNAL
• Department Lawyers: SHANTAM BOSE
• Section: 194C

Judgement Text

ITA NO./509/COCH/2015 1 , IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN . . , ., ! ! ! ! BEFORE S/SHRI B. P. JAIN, AM & GEORGE GEORGE K., JM ' ' ' ' ./ I.TA NO.509/COCH/2015 ( #$ % /ASSESSMENT YEAR : 2011-12) THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, ALLEPPEY. VS M/S. PREMIER MARINE FOODS, NIZAM MANZIL, VANDANAM, ALLEPPEY. ( &' &' &' &' /REVENUE APPELLANT) ( ( (( ( ) ) ) ) &' &'&' &' /REVENUE -RESPONDENT) & . . ' ./PAN NO. AAEFP 7788C &' * + /REVENUE BY SHRI SHANTAM BOSE, CIT(DR) ( ) &' * + /ASSESSEE BY SHRI R. SREENIVASAN, FCA ,- * ./ / DATE OF HEARING 08/09/2016 0 % * ./ /DATE OF PRONOUNCEMENT 26/09/2016 1 1 1 1 /ORDER PER B.P. JAIN, AM: THIS APPEAL OF THE REVENUE ARISES FROM THE ORD ER OF THE LD. CIT(A), KOTTAYAM DATED 27-08-2015 FOR THE AY 2011-12. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: A. THE ORDER OF THE LD. IN SO FAR AS THE POINTS S TATED BELOW ARE CONCERNED IS OPPOSED TO LAW ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE. B) THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLO WANCE OF RS.1,14,07,877/- HOLDING THAT THE AMOUNT PAID TO M/S. GEO ACQUATIC U NDER THE HEAD PLANT REPAIR REPRESENTED REIMBURSEMENT OF EXPENSE AND HENCE, NO TAX WAS DEDUCTED AT SOURCE. ITA NO./509/COCH/2015 2 C)THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH M /S. GEO ACQUATIC (THE PROCESSOR) CLEARLY STATES THE WORKS TO BE UNDE RTAKEN BY THE PROCESSOR/CONTRACTOR AS WASHING, CLEANING, PROCESS ING, FREEZING, PACKING AND STORING AND THE PAYMENTS MADE INCLUDE STORING CHARGES, PEELING CHARGES REPACKING CHARGES, LABOUR CHARGES E TC. D) THE NAME OF WORK UNDERTAKEN BY THE PROCESSOR AND THE NATURE OF PAYMENTS MADE TO THEM ITSELF SHOW THAT THE ASSESSEE HAD TO NECESSARILY DEDUCT TAX AT SOURCE U/S. 194C OF THE ACT. E) THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIO N U/S. 40(A)(IA) OF RS.20,02,535 FOR NON DEDUCTION OF TAX AT SOURCE FRO M CLEARING AND FORWARDING CHARGES. F. THE LD. CIT(A) OUGHT TO HAVE NOTED THAT THE PAYM ENTS MADE UNDER THE HEAD CLEARING AND FORWARDING ARE USUALLY ALSO INC LUSIVE OF COMMISSION/SERVICE CHARGES PAID TO THE AGENCY. CIR CULAR NO. 5/2002 OF THE CBDT CLARIFIES THAT CLEARING AND FORWARDING AGE NTS ACTS AS INDEPENDENT CONTRACTORS AND ANY PAYMENT MADE TO THE M WOULD, HENCE, BE LIABLE FOR DEDUCTION OF TAX AT SOURCE. G. THE INTEREST ON VEHICLE LOAN PAID BY THE ASSESSE E TO M/S. SUNDARAM FINANCE AND OTHER PRIVATE COMPANIES WAS SEPARATELY DEBITED IN THE PROFIT AND LOSS ACCOUNT AND HENCE, TAX WAS DEDUCTABLE AT S OURCE ON THE INTEREST PAID. 2. THE BRIEF FACTS OF THE CASE ARE THAT BY ORDER DATE D 28/02/2014, THE ADDITIONAL COMMISSIONER OF INCOME TAX HAS COMPLETED THE ASSESSMENT OF THE ASSESSEE FIRM DETERMINING A TOTAL INCOME OF RS.4,16 ,47,383/- AS AGAINST RETURNED INCOME OF RS.35,20,460/-. VARIOUS ADDITIONS HAVE B EEN MADE WHICH HAVE BEEN DELETED BY THE LD. CIT(A). THIS REVENUE IS IN APPE AL. 3. DURING THE YEAR THE ASSESSEE HAD CLAIMED AN EXPENDI TURE OF RS.1,14,07,877/- UNDER THE HEAD PLANT REPAIRS. ACCO RDING TO THE ASSESSING OFFICER ITA NO./509/COCH/2015 3 THE ASSESSEE FIRM IS LIABLE TO DEDUCT TAX ON THIS E XPENDITURE PAID TO M/S. GEO ACQUATIC. DURING THE ASSESSMENT PROCEEDINGS, IT WA S EXPLAINED TO THE ASSESSING OFFICER THAT THIS AMOUNT COMPRISES OF REIMBURSEMENT OF EXPENSES TO M/S. GEO ACQUATIC AS PER LIST ENCLOSED. M/S. GEO ACQUATIC I S PROCESSING MARINE PRODUCT FOR THE ASSESSEE BY VIRTUE OF AN AGREEMENT. ACCORD ING TO THE ASSESSING OFFICER THE ASSESSES IS HAVING THE CONTRACT FOR PROCESSING, FREEZING AND STORING THE MARINE PRODUCTS FOR EXPORT BY THE FIRM, WHICH ARE M ENTIONED IN THE AGREEMENT. ACCORDING TO THE ASSESSING OFFICER, ONE EACH OF THE BILL RAISED BY M/S. GEO ACQUATIC, ITEM WISE CHARGES UNDER VARIOUS HEADS ARE MENTIONED. THE ASSESSING OFFICER CONCLUDED THAT THIS IS THE NATURE OF WORK A ND ON THIS THE ASSESSEE IS LIABLE TO DEDUCT TAX AT SOURCE. FURTHER, SHE CONCLUDED TH AT BILLS RAISED BY M/S. GEO ACQUATIC IS A CONSOLIDATED ONE AND HENCE ON THE ENT IRE AMOUNT OF TAX HAS TO BE DEDUCTED UNDER SEC. 194C. 4. THE LD. CIT(A) IN HIS ORDER HAS PARTLY ALLOWED THE VARIOUS ISSUES RAISED BY THE ASSESSEE AGAINST WHICH THE REVENUE IS IN APPEA L BEFORE US. 5. GROUND NO. 2(B), (C) AND (D) RELATE TO DELETION OF ADDITION MADE TO THE EXTENT OF RS.1,14,07,877/- HOLDING THAT THE AMOUNT PAID AS PLANT REPAIRS TO M/S. GEO ACQUATIC (P) LTD. REPRESENT THE REIMBURSEMENT O F EXPENSES AND HENCE NO TAX WAS DEDUCTABLE AT SOURCE. ACCORDING TO THE REV ENUE THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH M/S. GEO ACQUATIC (P) LTD. (THE PRINCIPAL) ITA NO./509/COCH/2015 4 CLEARLY STATES THAT WORK TO BE UNDERTAKEN BY THE PR OCESSOR/CONTRACTOR WAS FREEZING, PROCESSING, PACKING AND STORING AND THE P AYMENT INCLUDES PEELING CHARGES, REPACKING CHARGES, LABOUR CHARGES ETC. AC CORDING TO THEM THE NATURE OF WORK UNDERTAKEN BY THE PROCESSOR AND THE NATURE OF PAYMENT MADE BY THEM ITSELF SHOWS THAT THE ASSESSEE HAS TO NECESSARILY D EDUCT TAX AT SOURCE U/S. 194C OF THE ACT. ON THIS BASIS THE LD. DR CONTENDED THAT THE AGREEMENT READ WITH THE NATURE OF WORK WOULD SUGGEST THAT THIS IS A CONTRAC T WITHIN THE MEANING OF SEC. 194C OF THE I.T. ACT LIABLE TO TAX DEDUCTION AT SOU RCE. 6. GROUND NO. 2(E) AND (F) RELATE TO DELETION OF ADDIT ION OF RS.20,02,535/- UNDER THE HEAD CLEARING AND FORWARDING FOR NON DEDU CTION OF TAX U/S. 40(A)(IA). ACCORDING TO THE LD. DR, THE LD. CIT(A) HAS NOT AP PRECIATED THE FACT THAT THE PAYMENT MADE UNDER THE HEAD CLEARING AND FORWARDING ARE NORMALLY INCLUSIVE OF COMMISSION, SERVICE CHARGES PAID TO THE AGENCY. IN THIS REGARD CIRCULAR NO. 05/2002 OF CBDT WAS RELIED UPON WHICH CLARIFY THAT CLEARING AND FORWARDING AGENTS ACT AS INDEPENDENT CONTRACTORS AND ANY PAYME NT MADE TO THEM WOULD BE LIABLE FOR DEDUCTION OF TAX AT SOURCE. 7. GROUND NO. 2(G) RELATES TO INTEREST ON VEHICLE LOA N PAID BY THE ASSESSEE TO M/S. SUNDARAM FINANCE AND OTHERS WHICH ARE SEPAR ATELY DEBITED IN THE PROFIT AND LOSS ACCOUNT AND HENCE LIABLE FOR DEDUCTION OF TAX ON INTEREST PAID. ITA NO./509/COCH/2015 5 8. THE LD. COUNSEL FOR THE ASSESSEE, SHRI R. SREENIVAS AN, FCA REITERATED THE ARGUMENTS MADE BEFORE THE LD. CIT(A). AS FOR NON D EDUCTION OF TAX AT SOURCE ON THE REIMBURSEMENT OF EXPENSES PAID TO M/S. GEO A CQUATIC, IT WAS SUBMITTED TO THE ASSESSING OFFICER THAT THE RATIO O F THE CASE OF THE HONBLE APEX COURT IN HINDUSTAN COCO COLA BEVERAGES PVT. LT D. VS. CIT SQUARELY APPLIES TO THE FACTS SINCE THE RECIPIENT FIRM IS ALSO ASSES SED TO TAX AND HAVE INCLUDED ALL THE RECEIPTS IN THEIR INCOME. ACCORDING TO THE ASS ESSING OFFICER, THE CASE OF THE HONBLE SUPREME COURT (SUPRA) CANNOT BE APPLIED IN A CASE WHERE ADDITION IS MADE U/S. 40(A)(IA) OF THE ACT. 9. IT WAS ALSO SUBMITTED THAT SEC. 40(A)(IA) OF THE AC T HAS BEEN AMENDED FROM 01.04.2013 BY WHICH NO ADDITION SHOULD BE MADE UNLESS THE ASSESSEE WAS DEEMED TO BE IN DEFAULT AND THE RECIPIENT HAVING FI LED THEIR RETURN OF INCOME WITHIN THE DUE DATE. IN THE ASSESSEES CASE, THE R ECIPIENT WAS AN ASSESSEE ON RECORD BY PA NUMBER AND THE AMENDMENT BEING PROCEDU RAL APPLIES FOR ALL PENDING CASES. 10. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAD ACTUALL Y PAID THE ENTIRE AMOUNT TO M/S. GEO ACQUATIC BEFORE THE CLOSE OF THE PREVIOUS YEARS. SO MUCH SO NOTHING IS OUTSTANDING, AND HAVING REGARD TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VECTOR SHIPPIN G SERVICES PVT. LTD., THE PROVISIONS OF SEC. 40(A)(IA) ARE NOT APPLICABLE. C OPY OF THE DECISION OF THE ITA NO./509/COCH/2015 6 HONBLE SUPREME COURT AND HONBLE ALLAHABAD HIGH CO URT OF THE SAME ENTERPRISE WERE FILED. COPY OF THE DECISION OF THE CHENNAI BENCH OF ITAT IN THE CASE OF THEKKATHIR PRESS MADRAS WAS ALSO REFERRED T O. AS THE CASE LAW STANDS TODAY BY VERDICT OF THE HONBLE SUPREME COURT THE D ISALLOWANCE IS NOT WARRANTED. RELIANCE WAS ALSO PLACED ON THE JURISDIC TIONAL HIGH COURT IN THE CASE OF MUTHOOT FINCORP LTD. AND HONBLE DELHI HIGH COURT IN THE CASE OF DLF COMMERCIAL PROJECTS. 11. THE LD. CIT(A) HELD THAT IN RESPECT OF THE VARIOUS REIMBURSEMENTS OF EXPENSES AS GIVEN IN THE LIST THE ASSESSEE HAD NOT DEDUCTED TAX. ACCORDING TO THE ASSESSEE THESE PAYMENTS HAVE BEEN MADE IN CONSO NANCE WITH CLAUSE 3, SUB-SECTION (B) TO (H) OF THE AGREEMENT OF 07/10/20 10. THE AGREEMENT CLEARLY SHOWS THAT APART FROM THE PAYMENT MADE BY VIRTUE OF CLAUSE 3A TO THE AGREEMENT, BEING PROCESSING CHARGES WHICH WOULD ATT RACT TDS AND WHICH HAS BEEN DEDUCTED, THE REST OF THE PAYMENTS ARE IN THE NATURE OF REIMBURSEMENT. M/S. GEO ACQUATIC HAVE ALSO RAISED THE BILL, SEPARA TELY SHOWING THE PROCESSING CHARGES AND VARIOUS EXPENSES INCURRED BY THEM. ACC ORDING TO THE AUTHORIZED REPRESENTATIVE, REIMBURSEMENT OF EXPENSES IS NOT TA XABLE IN THE HANDS OF THE RECIPIENT. THIS WILL ONLY GO TO REDUCE THEIR EXPEND ITURE INCURRED UNDER PARTICULAR HEADS AND IN SUCH CASES THERE IS NO LIABILITY TO DE DUCT TAX. THE ASSESSEE HAS PLACED RELIANCE ON THE DECISION OF THE ITAT DELHI B ENCH D IN THE CASE OF ITO VS. DR. WILLMAR SCHWAB (I) PVT. LTD., A COPY OF WHICH H AS BEEN FILED. IT HAS BEEN ITA NO./509/COCH/2015 7 HELD IN THE SAID DECISION THAT REIMBURSEMENT OF EXP ENSES DOES NOT ATTRACT THE PROVISIONS OF TDS. 12. NOW THE ISSUE TO BE DECIDED HERE IS WHETHER THE PA YMENT MADE UNDER THE HEAD PLANT REPAIR REPRESENTS REIMBURSEMENT OF E XPENSES. IN OUR VIEW THE SPLIT UP GIVEN BY THE ASSESSEE HAS TO BE READ IN CO NJUNCTION WITH CLAUSE 3(B) TO (H) OF THE AGREEMENT. IT WOULD BE CLEAR THAT PAYME NTS ARE IN NATURE OF REIMBURSEMENT OF EXPENSES. RESPECTFULLY FOLLOWING T HE DECISION OF ITAT DELHI BENCH D, AND THE DECISION OF HONBLE KERALA HIGH CO URT (SUPRA), WE HOLD THAT THE PAYMENT MADE TO M/S. GEO ACQUATIC, DEBITED UNDE R THE HEAD PLANT REPAIRS DOES NOT ATTRACT TDS LIABILITY. 13. FURTHER THE LD. AR FILED A SECOND PAPER BOOK SHOWIN G COPY OF BILLS RAISED BY M/S. GEO ACQUATIC PVT. LTD., CHANDIROOR. HE STA TED THAT PAGE 1 TO 32 OF THE PAPER BOOK RELATES TO BILLS RAISED FOR PROCESSING C HARGES ON WHICH TDS HAS BEEN DEDUCTED. PAGE 33 TO 116 RELATES TO BILLS RAISED W ITH ANNEXURE FOR REIMBURSEMENT OF VARIOUS EXPENSES INCURRED WHICH IS THE SUBJECT MATTER OF DISPUTE. ACCORDING TO HIM, SEPARATE BILLS HAVE BEE N RAISED FOR EXPENSES ON WHICH TDS HAS BEEN DEDUCTED AND FOR REIMBURSEMENT O F EXPENSES AND HENCE THEY ARE NOT LIABLE FOR TDS. HE ALSO REFERRED TO T HE DECISION OF ITAT DELHI BENCH IN THE CASE OF ITO VS. WILLMAR SCHWABE INDIA (P) LT D. TO THE EFFECT THAT REIMBURSEMENT OF EXPENSES DOES NOT ATTRACT THE PROV ISIONS OF TDS. HE ALSO ITA NO./509/COCH/2015 8 REFERRED TO THE DECISION OF ITAT DELHI BENCH D IN T HE CASE OF DLF COMMERCIAL PROJECTS TO THIS EFFECT. REFERENCE WAS ALSO PLACED ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF MUTHOOT FI NCORP LTD., TRIVANDRUM, WHEREIN THE HON. JURISDICTIONAL HIGH COURT HAVE GIV EN A DIRECTION TO ASSESSING OFFICER TO VERIFY THE NATURE OF REIMBURSEMENT OF EX PENSES IN THAT CASE WHERE SEPARATE BILLS HAVE BEEN RAISED. THE ACIT, CIR(1) T VM BY HER ORDER DATED 11/08/2014 HAVE GIVEN EFFECT TO THE ORDER OF HON. H IGH COURT WHEREIN SHE HAD ALSO REFERRED TO VARIOUS DECISIONS AT PAGE 3 OF THE ORDER AND CONCLUDED THAT SINCE THE ASSESSEE RAISED SEPARATE BILLS FOR REIMBU RSEMENT OF EXPENSE THEY ARE NOT LIABLE TO DEDUCT TAX AND DELETED THE ADDITION M ADE U/S. 40(A)(IA). IT WAS ARGUED THAT THE ASSESSEE HAS ALSO GIVEN SEPARATE BI LL AND THEREFORE THE PROVISIONS OF TDS ARE NOT APPLICABLE FOR THEM ALSO. 14. THE SECOND ISSUE RELATES TO DELETION OF CLEARING AND FORWARDING CHARGES PAID TO M/S. AL MUSTAFA AGENCIES WITHOUT DEDUCTION OF TAX. ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE M/S. AL MUSTAFA AGENCI ES ARE ENGAGED FOR FILING OF DOCUMENTS AT CUSTOMS, INSPECTION BY CUSTOMS, LABOUR CHARGES, PAYMENT FOR TRAILER AND OTHER PORT PAYMENTS. NONE OF THESE EXPE NDITURE ARE WITHIN THE PURVIEW OF TDS PROVISIONS. THE LD. CIT(A) HELD THA T IT IS A FACT THAT AL MUSTAFA AGENCIES WERE CARRYING OUT VARIOUS SERVICES TO THE ASSESSEE FOR THE EFFECTIVE ITA NO./509/COCH/2015 9 EXPORT AND SHIPPING OF GOODS LIKE FILING DOCUMENTS WITH CUSTOMS, PAYMENT OF CESS, PAYMENT FOR INSPECTION BY CUSTOMS, LABOUR CHA RGES IN PORT, RENT FOR TRAILER AND OTHER PORT DUES. MAY BE THEY ARE CHARGING SERVI CE CHARGES FOR ALL THE ACTIVITIES. NEVERTHELESS THE ABOVE PAYMENTS PERTAIN S TO PAYMENT MADE TO STATUTORY AUTHORITIES, LABOURERS AND TRAILER RENT O N BEHALF OF THE ASSESSEE AND NONE OF THEM HAVE ACCRUED TO THE AGENT. ACCORDINGL Y, THIS PAYMENT WILL NOT BE LIABLE TO TAX DEDUCTION. THE ASSESSMENT ORDER I S ALSO NOT CLEAR OR THE ASSESSING OFFICER HAS NOT QUANTIFIED WHAT ARE THE E XACT CHARGES PAID TO AL MUSTAFA AGENCIES TOWARDS THESE SERVICES. IN THESE C IRCUMSTANCES AND IN THE ABSENCE OF MATERIAL ON RECORD HE HAS HELD THAT THE DISALLOWANCE OF CLEARING AND FORWARDING CHARGES AS HE HAS DONE IS NOT WARRAN TED. HE HAS ALSO CONSIDERED THE DECISION OF HONBLE DELHI HIGH COURT . 15. YET ANOTHER POINT IN REVENUES APPEAL IS ON THE DEL ETION OF ADDITION MADE OUT OF VEHICLE LOAN HIRE CHARGES OF RS.3,61,136/- W ITHOUT DEDUCTION OF TAX. THIS IS MAINLY PAID TO M/S. SUNDARAM FINANCE. HERE ALSO T HIS IS PAID AS EMI ALONG WITH PRINCIPAL PAYMENT. THEREFORE THE PROVISIONS OF TDS ARE NOT APPLICABLE. THE LD. CIT(A) HELD THAT HIRE PURCHASE PAYMENT WOULD NOT CO ME WITHIN THE MEANING OF SEC. 194C FOR THE PURPOSE OF TAX DEDUCTION. FURTHE R PAYMENTS ARE MADE UNDER THE EQUATED MONTHLY INSTALMENT SCHEME. IT IS NOT C OVERED BY THE TDS PROVISIONS. ACCORDINGLY, THE ADDITION MADE ON THIS SCORE HAS BEEN DELETED. ITA NO./509/COCH/2015 10 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUS ED THE FACTS OF THE CASE. THE FIRST ISSUE IS REGARDING DELETION OF ADD ITION MADE UNDER SECTION 40(A)(IA) ON REIMBURSEMENT OF EXPENSES PAID TO M/S. GEO ACQUATIC (P) LTD. IN THIS CASE AS POINTED OUT BY THE LD. AR SEPARATE BIL LS HAVE BEEN RAISED FOR PROCESSING CHARGES AND REIMBURSEMENT OF EXPENSES AN D THE ASSESSEE HAS DEDUCTED ON THE PORTION OF PROCESSING CHARGES AND N OT DEDUCTED TAX ON REIMBURSEMENT OF EXPENSES. REIMBURSEMENT OF EXPENS ES COMPRISES OF VARIOUS ITEMS LIKE STORING CHARGES, PEELING CHARGES, FLAKE ICE CHARGES, UTILITY OF LAB AND CONSUMABLES, RE-GLAZING AND HARDENING REPACKING CHA RGES, TUNNEL, LAB CHARGES, MAINTENANCE, DISPOSAL EXPENSE, GENERATOR C HARGES ETC. AGREEMENT 3B TO H PRESCRIBES THE RATE FOR ALL THESE ACTIVITIE S. IN OUR VIEW THIS AGREEMENT IS BASED ON THE PARTIES HAVING REGARD TO THE ACTUAL EX PENSES INCURRED. THE PROCESSING CHARGES PAID IS SEPARATELY BILLED ON WHI CH TDS HAS BEEN DEDUCTED. HAVING REGARD TO THE FACT THAT SEPARATE BILLS HAVE BEEN GIVEN AND BASED ON VARIOUS JUDICIAL PRONOUNCEMENTS CITED BY THE LD. AR AND HAVING REGARD TO THE FACT THAT THE REVENUE HAS ACCEPTED THIS FACT OF SEP ARATE BILL IS ANOTHER CASE AS DIRECTED BY THE JURISDICTIONAL HIGH COURT. WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX ON RE IMBURSEMENT OF EXPENSES TO THE TUNE OF RS.11407877 AND ACCORDINGLY, WE UPHOLD THE DECISION OF THE LD. CIT(A) IN THIS REGARD. ITA NO./509/COCH/2015 11 17. WITH REGARD TO THE ADDITION OF CLEANING AND FORWARD ING CHARGES TO AL MUSTAFA AGENCIES, THE AMOUNT PAID IS IN THE NATURE OF DOCUMENTATION CHARGES, CUSTOMS CHARGES, PAYMENT FOR TRAILER AND OTHER PORT PAYMENTS. ACCORDING TO THE ASSESSING OFFICER THE BILLS ISSUED BY THEM ONLY SHOWS THE BREAKUP OF WORK DONE AND THEREFORE THE PAYMENT IS WITHIN THE PROVIS IONS OF TDS. THE LD. CIT(A) HAS HELD THAT M/S. AL MUSTAFA AGENCIES WERE CARRYIN G OUT VARIOUS SERVICES TO THE ASSESSEE FOR THE EXPORT OF GOODS SUCH AS DOCUMENTAT ION WITH CUSTOMS, REGISTRATION, INSURANCE, RENT AND OTHER PORT DUES. NEVERTHELESS ALL THE ABOVE PAYMENT RELATES TO PAYMENT TO STATUTORY AUTHORITIES , LABOURERS AND OTHERS, ON BEHALF OF THE ASSESSEE AND NONE OF THEM ACCRUED TO THE AGENT. IN OUR VIEW THE ABOVE PAYMENT WILL ALSO NOT BE LIABLE TO TDS. THE ASSESSING OFFICER HAS NEITHER QUANTIFIED NOR CLEAR OF THE EXACT CHARGES PAID TO M /S. AL MUSTAFA AGENCIES. IN THE ABSENCE OF ANY MATERIAL ON RECORD, WE UPHOLD TH E VIEW OF THE LD. CIT(A) IN THIS REGARD. 18. AS REGARDS THE VEHICLE LOAN HIRE CHARGES OF RS.3611 36 MADE TO M/S. SUNDARAM FINANCE, AS STATED BY THE LD. AR THIS IS P AID AS EQUATED MONTHLY INSTALMENT (EMI) ALONG WITH PRINCIPAL. THE LD. CIT (A) HAS HELD THAT HIRE PURCHASE PAYMENT WOULD NOT COME WITHIN THE MEANING OF SECTIO N 194C FOR THE PURPOSE OF TAX DEDUCTION. IN OUR VIEW MERELY BECAUSE A CLA IM FOR THE HIRE CHARGES PORTION HAS BEEN MADE IN THE ACCOUNT, IT CANNOT BE STATED THAT SUCH PAYMENT ARE LIABLE TO TDS. FURTHER THE ASSESSEE HAS BEEN CL AIMING SUCH PAYMENT IN ITA NO./509/COCH/2015 12 EARLIER YEARS ALSO WHICH HAS BEEN ACCEPTED BY THE D EPARTMENT. THE LEGISLATURE THOUGHT IT FIT TO INTRODUCE FORM 26A WITH EFFECT FR OM 01/04/2013, FOR OBTAINING CERTIFICATE FROM THE RECEIVER TO THE EFFECT THAT TH EY HAVE INCLUDED SUCH RECEIPTS AS PART OF THEIR INCOME. IN VIEW OF THE ABOVE WE ARE OF THE VIEW THAT THE VERDICT OF LD. CIT(A) ON THIS SCORE HAS ALSO TO BE UPHELD. THUS ALL THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL FAILS. 19. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 26-09/ 2016. SD/- SD/- ( . ) (GEORGE GEORGE K.) ( . . ) (B. P. JAIN) /JUDICIAL MEMBER /ACCOUNTANT MEMBER & /PLACE: /COCHIN 2 /DATED: 26TH SEPTEMBER, 2016. GJ/ 1 * (.3 43%. /COPY TO: 1. &' /M/S. PREMIER MARINE FOODS, NIZAM MANZIL, VANDANAM, ALLEPPEY. 2. () &' /THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1 , ALLEPPEY. 3. ,5 . ( )/THE COMMISSIONER OF INCOME-TAX(APPEALS),KOTTAYAM. 4. ,5 . /THE COMMISSIONER OF INCOME-TAX, KOTTAYAM. 5. 367 (. , /THE DR/ITAT, COCHIN BENCH. 6. 79 :- /GUARD FILE. 1, /BY ORDER ; /ASSISTANT REGISTRAR - .