Essar Ve Enterprises, CHENNAI V. ACIT, CHENNAI

ITA 528/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90675 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 02-07-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 16-03-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: N QUADIR HOSEYN; DR L NATARAJAN
• Section: 194C

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL A BENCH, CHE NNAI , . ! ! ! ! , ' ' ' ' #$ #$ #$ #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 528/MDS/2015 ASSESSMENT YEAR : 2010-11 M/S. ESSAR VE ENTERPRISES, OLD NO.5, NEW NO. 9, ERRABALU CHETTY STREET, CHENNAI 1. [PAN: AABFE1402B] VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, BUSINESS CIRCLE VIII, CHENNAI 34. ( %& %& %& %& /APPELLANT ) ( '(%& '(%& '(%& '(%& / RESPONDENT ) %& ) * / APPELLANT BY : SHRI N. QUADIR HOSEYN, ADVOCATE & DR. L. NATARAJAN, C.A. '(%& ) * / RESPONDENT BY : SHRI P. RADHAKRISHNAN, JCIT ) + / DATE OF HEARING : 02.07.2015 ,-. ) + /DATE OF PRONOUNCEMENT : 17.07.2015 / / / / / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 13, CHENNA I, DATED 27.11.2014 RELEVANT TO THE ASSESSMENT YEAR 2010-11. 2. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF CLEARING, FORWARDING AND TRANSPORT. THE ASSESSEE HAS CLAIMED STORAGE AND PARKING CHARGES AMOUNTING TO .75,68,418/- IN THE PROFIT AND LOSS ACCOUNT. THE ASSESSING OFFICER HAS CALLED DETAILS OF PAYMENTS MA DE BY THE ASSESSEE. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFIC ER, THE ASSESSEE HAS I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .5 55 528 2828 28/M/1 /M/1 /M/1 /M/15 55 5 2 SUBMITTED VIDE LETTER DATED 23.01.2013 THAT FOR AL L DIRECT EXPENDITURES LIE CUSTOMS DUTY, STEAMER AGENT CHARGES, STORAGE AND PA RKING CHARGES, THE ASSESSEE WILL BE GETTING INVOICE OR RECEIPT FROM TH E CONCERNED DEPARTMENTS ONLY IN THE NAME OF CUSTOMERS AND NOT IN COMPANYS NAME. AFTER DOING FULL PAYMENT TO THE ABOVE EXPENDITURES, THE ORIGINAL BIL LS WILL BE FORWARDED TO THE CUSTOMERS FOR REIMBURSEMENT OF THE EXPENDITURE. THE CUSTOMERS WILL REIMBURSE THE EXPENDITURE AFTER ADJUSTING THE ADVAN CE. SINCE THE ABOVE MENTIONED EXPENDITURE BILLS ARE IN THE NAME OF THE CUSTOMERS AND THEY REIMBURSE THE EXPENDITURE, IT DOES NOT ATTRACT ANY TDS ON PAYMENTS. AFTER CONSIDERING THE EXPLANATION AND DETAILS FILED BY TH E ASSESSEE, THE ASSESSING OFFICER HAS OBSERVED THAT THE CONTENTIONS OF THE AS SESSEE THAT INVOICE WILL BE ONLY IN THE NAMES OF ASSESSEES CUSTOMERS AND NOT I N THE NAME OF THE ASSESSEE IS FOUND TO BE FALSE. SECONDLY, EVEN IF TH E CONTRACT IS BETWEEN THE ASSESSEES CUSTOMERS AND THE CONTAINER FREIGHT STAT IONS, AS PER SECTION 194C OF THE INCOME TAX ACT, THE RESPONSIBILITY TO D EDUCT TDS IS ON THE PERSON WHO IS MAKING THE PAYMENT. ALSO SERVICE TAX PROCEDURES DO NOT HAVE ANY BEARING ON THE INCOME TAX PROCEEDINGS. ACCORDI NGLY, THE ASSESSING OFFICER DISALLOWED THE EXPENSES CLAIMED BY THE ASSE SSEE ON STORAGE AND PARKING CHARGES BY INVOKING SECTION 40(A)(IA) OF TH E ACT. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LD. CIT(A) AND THE LD. CIT(A) CONFIRMED THE ORDER PASSED BY THE AS SESSING OFFICER. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .5 55 528 2828 28/M/1 /M/1 /M/1 /M/15 55 5 3 4. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS COVERED BY THE DEC ISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS V. ADDL.CIT [2012] 16 ITR (TRIB)1. 5. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T IT IS THE DUTY OF THE ASSESSEE TO DEDUCT TDS. THEREFORE, THE ASSESSING OF FICER HAS RIGHTLY INVOKED SECTION 40(A)(IA) OF THE ACT AND RELIED ON THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS ING OFFICER HAS DISALLOWED THE EXPENSES CLAIMED BY THE ASSESSEE ON STORAGE AND PARKING CHARGES ON WHICH THE ASSESSEE FAILED TO DEDUCT TDS AND THEREBY SECTION 40(A)(IA) WAS INVOKED. ON APPEAL, THE LD. CIT(A) CO NFIRMED THE ORDER PASSED BY THE ASSESSING OFFICER. NOW THE CASE OF THE ASSES SEE IS THAT IT HAS ALREADY PAID ALL THE AMOUNTS AND NO AMOUNT IS PENDING. ONCE ALREADY AMOUNTS ARE PAID, THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN THE CASE OF MYERLIN SHIPPING AND TRANSPORTS V. ADDL.CIT (SUPRA) SQUAREL Y APPLIES TO THE CASE. AGAINST THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. VECTOR SHIPPING SERVICES P. LTD. 357 ITR 642(ALL ), WHEREIN, THE DECISION IN THE CASE OF MYERLIN SHIPPING AND TRANSPORTS V. ADDL .CIT (SUPRA) HAS BEEN I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .5 55 528 2828 28/M/1 /M/1 /M/1 /M/15 55 5 4 CONSIDERED AND DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE, THE DEPARTMENT HAS PREFERRED SLP BEFORE THE HONBLE SUPREME COURT AND THE HONBLE SUPREME COURT HAS DISMISSED THE SLP IN CC NO. 8068/ 2014 VIDE ORDER DATED 02.07.2014. IN VIEW OF THE DISMISSAL OF THE S LP FILED BY THE DEPARTMENT, THE ORDER PASSED BY THE HONBLE ALLAHAB AD HIGH COURT HAS BECOME FINAL. THEREFORE, IT CAN BE SAFELY CONCLUDED THAT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 7. HOWEVER, WE FIND THAT THERE IS NOTHING ON RECOR D THAT THE ASSESSEE HAS ALREADY PAID THE AMOUNT. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO EXAMINE WHETHER PAYMENTS WERE MADE OR NOT AND AFTER EXAMINING AND IF FOUND THAT THE PAYMENTS WERE ALREADY MADE, THE ASSE SSING OFFICER IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON FRIDAY, THE 17 TH OF JULY, 2015 AT CHENNAI. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 17.07.2015 VM/- I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .5 55 528 2828 28/M/1 /M/1 /M/1 /M/15 55 5 5 / ) ''+01 21.+ /COPY TO: 1. %& / APPELLANT, 2. '(%& / RESPONDENT, 3. 3 ( ) /CIT(A), 4. 3 /CIT, 5. 14 ''+' /DR & 6. 5! 6 /GF.