ITO 17(3)(1), MUMBAI V. RAJESHWAREE SHIPPING & LOGISTICS, MUMBAI

ITA 5321/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9635 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 30-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 142(1); 260A; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G. S. PANNU , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 5321 / MUM/ 201 6 ( / ASSESSMENT YEAR: 20 12 - 1 3 ) ITO 17(3)(1) ROOM NO. 114/111A, 1 ST FLOOR, AA YAKAR BHAVAN, M.K. RD. MUMBAI - 400 020 / VS. RAJESHSWAREE SHIPPING & LOGISTICS 24 BHANUSHALI BLDG. 35, MINT ROAD, NEAR GPO, FORT, MUMBAI PIN:400 0 01 ./ ./ PAN/GIR NO. : AA LFR 1162 R ( / A PPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 09.08 .2017 / DATE OF PRONOUNCEMENT : 22 .0 9 .2017 / O R D E R PER AMARJIT SINGH, J M: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 29 .06.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 8 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 1 2 - 1 3 . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT DUE TO NON DEDUCTION OF TDS IN RESPECT OF PAYMENTS MADE BY THE ASSESSEE F OR AND ON BEHALF OF ITS CLIENTS, WHICH ARE FULLY REIMBURSED TO IT BY ITS CLIENTS, CANNOT BE INVOKED IN THE CASE OF THE ASSESSEE, AND THEREBY DIRECTING TO DELETE THE REVENUE BY : SHRI RAJESH KUMAR YADAV (DR) ASSESSEE BY: SHRI NONE ITA. NO.5321/M/2015 A.Y.2012 - 13 2 DISALLOWANCE OF RS.3,43,83,646/ - U/S 40(A)(IA) OF THE ACT, WITHOUT APPRECIATING THE FACTS T HAT - THE DECISION OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR A.Y. 2010 - 11 WHICH HAS BEEN RELIED UPON BY THE LD. CIT(A) TO GRANT RELIEF TO THE ASSESSEE HAS DRAWN SUSTENANCE FROM THE DECISION OF THE HONBLE MUMBAI ITAT IN THE CASE OF M/S RANK SHIPP ING AGENCY PVT. LTD., WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL U/S 260A HAS BEEN ADMITTED BEEN ACCEPTED BY THE DEPARTMENT AND APPEAL U/S 260A HAS BEEN ADMITTED BY IT VIDE I.T. APPEAL NO. 1271 OF 2013 . THE HONBLE JHARKHAND HIGH COURT IN T HE CASE OF CIT VS. MD. TABARAK, 61 TAXMANN.COM 94 WHILE DECIDING THE ISSUE IN FAVOUR OF REVENUE, HAS HELD THAT THOUGH THE ASSESSEE HAS ACTED AS A BROKER FOR AND ON BEHALF OF HIS CLIENTS, NONETHELESS, HE IS LIABLE TO DEDUCT TDS U/S, 194C OF THE ACT, AND IN LIGHT OF FAILURE TO DO SO, THE DISALLOWANCE U/S 40(A)(IA) OF THE ACT MADE BY THE AUTHORITIES BELOW WAS TO BE CONFIRMED. THE APPELLANT PRAYS THAT THE ORDER OF THE AO SHOULD BE RESTORED AND ORDER OF THE CIT(A) SHOULD BE SET ASIDE. THE APPELLANT CRAVES LE AVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 29 . 09.2012 FOR THE ASSESSMENT YEAR OF 2012 - 13 DECLARING TOTAL INCOME TO THE TUNE OF RS. 15,85,6 80 / - . THE RETURN WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). THEREAFTER, T HE CASE WAS SELECTED FOR SCRUTINY . THEREAFTER, N OTIC E U/S.143(2) OF THE ACT DATED 18 .09 .201 3 WAS ISSUE D AND SERVED UPON THE ASSESSEE. SUBSEQUENTLY, NOT ICE S U/S 142(1) WERE ISSUED. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING LOGISTIC SERVICE RELATING TO EXPORT/IMPORT VIZ. TRANSPORTATION, WAREHOUSING, PACKAGING, CUSTOM CLEARANCE, ARRANGING CONTAINER WITH SHIPPING LINES, ARRANGEMENT OF LABOR FOR OF FLOADING/LOADING CARGO ETC. ON VERIFICATION, IF WAS FOUND THAT THE ASSESSEE RECEIVED CONTRACTUAL RECEIPTS TO THE TUNE OF RS.4,23,10,910/ - ON WHICH TDS AMOUNTING TO RS. 12,06,881/ - WAS DEDUCTED. THE ASSESSEE ALSO MADE PAYMENT OF RS.3,43,83,646/ - TO DIFFEREN T CONTAINER FREIGHT STATIONS/ YARD COMPANIES OF THE JNPT/BPT FOR ITA. NO.5321/M/2015 A.Y.2012 - 13 3 VARIOUS SERVICES RENDERED BY THEM. THE CONTAINER FREIGHT S TATIONS/ YARD SERVICES/YARD COMPANIES WERE MOSTLY PRIVATE PARTIES WHO PROVIDED DIFFERENT SERVICES TO THE ASSESSEE AND THE PAYMENT WA S MADE TO THEM BY ASSESSEE. NO TDS WAS DEDUCTED ON PAYMENT MADE TO RS.3,43,83,646/ - IN VIEW OF THE PROVISIONS U/S 40(A)(IA) OF THE ACT. AFTER THE SERVICE OF NOTICE , THE CLAIM OF THE ASSESSEE WAS DECLINED AND THE INCOME OF THE ASSESSEE WAS ASSESSED TO THE T UNE OF RS. 3,59,69,550/ - . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE CLAIM OF THE ASS ESSEE , THEREFORE, THE REVENUE IS FILED THE PRESENT APPEAL BEFORE US. 4 . WE HAVE HEARD TH E ARGUMENT ADVANCED BY THE LD. R EPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE L D. R EPRESENTATIVE OF THE REVENUE HAS ARGUED THAT THE CLAIM OF THE ASSESSEE HAS WRONGLY BEEN ALLOWED BY THE CIT(A) THEREFORE IN THE SAID CIRCUMSTANCES THE ORDER OF THE CIT(A) IS NOT JUSTIF IABLE , HENCE, IS NOT LIABLE TO BE SET ASID E. HOWEV ER, ON THE OTHER HAND, THE LD. R EPRESENTATIVE OF THE ASSESSEE HAS REFUTED THE SAID CONTENTIONS. BEFORE GOING FURTHER , IT IS NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - GROUND NO. 2 TO 7 THESE GROUNDS RELATE TO THE ACTION OF THE AO IN MAKING AN ADDITION OF RS. 34383646 A S DISALLOWANCE U/S 40(A)(IA) OF THE ACT IN RESPECT OF PAYMENTS MADE TO CONTAINER FREIGHT STATIONS/YARD COMPANIES. I FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE APPELLANT BY THE ORDER OF CIT(A) IN THE APPELLANTS O WN CASE FOR A.Y. 2010 - 11 WHICH HAS BEEN CONFIRMED BY THE HONBLE ITAT. I HAVE PERUSED THE ORDERS OF THE CIT(A) - 23 AND HONBLE ITAT IN ITA. NO, 7297/M/2013 DATED 27.05.2016. IN THE SAID ORDER, THE ITAT HAS DISMISSED THE APPEAL OF THE AO AND UPHELD THE ORDER OF THE CIT(A) - 23. FOLLOWING THE JUDGMENT OF HONBLE ITAT AND CIT(A) - 23 IN THE ASSESSEES OWN CASE, IT IS CLEAR THAT THE ITA. NO.5321/M/2015 A.Y.2012 - 13 4 PROVISIONS OF SEC. 40(A)(IA) OF THE I.T. ACT,1961 CANNOT BE INVOKED IN THE CASE OF THE APPELLANT IN RESPECT OF THE PAYMENTS MADE BY IT TO THE YARD COMPANIES (CFSS, ETC.) FOR AND ON BEHALF OF ITS CLIENTS WHICH ARE FULLY REIMBURSED TO IT BY THE CLIENTS. THEREFORE, THE ADDITION OF RS.34383646 IS DIRECTED TO BE DELETED. 5 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICE THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE FINDING OF THE HONBLE ITAT I THE ASSESSES OWN CASE IN ITA. NO. 7297/M/2013 DATED 27.05.2016 IN WHICH THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED FOR THE A.Y.2011 - 12 . THE NATURE OF THE TRANSACTION IS T H E SAME. NO DISTINGUISHABLE FACT HAS BEEN PLACED ON RECORD . CIT(A) HAS PASSED THE ORDER BY HONORING THE ORDER PASSED BY THE HONBLE ITAT IN THE ASSESSEES OWN CASE IN ITA. NO. 7297/M/2013 DATED 27.05.2016. NOTHING CONTRARY TO THE SAID LAW HAS BEEN PRODUCED BEFORE US. THEREFORE, THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS PASSED THE ORDER JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 6 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HEREBY ORDERED TO BE D ISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 .09. 2017 . SD/ - SD/ - ( G.S.PANNU ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED 22. 09. 2017 VIJAY / COPY OF THE ORDER FORWARDED TO : ITA. NO.5321/M/2015 A.Y.2012 - 13 5 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUA RD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI