ITO TDS (OSD) 1(2), MUMBAI V. EXPRESS TRANSPORT P. LTD, MUMBAI

ITA 5518/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2972 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 17-12-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 20-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI E BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 5518/MUM/2013 (ASSESSMENT YEAR:2011-12) ITO TDS (OSD) 1(2), R. NO.812, K.G. MITTAL HOSPITAL BLDG., CHARNI ROAD, MUMBAI 400 002 APPELLANT VS. M/S. EXPRESS TRANSPORT PVT. LTD. 2 ND FLOOR, KULKARNI PATIL BHAVAN, 14, MURZBAN ROAD FOR, MUMBAI 400001 RESPONDENT PAN: AAACE2632F /BY APPELLANT : SHRI J. SARAVANAN, D.R. /BY RESPONDENT :SHRI ATUL MODI, A.R. /DATE OF HEARING : 28.06.2016 /DATE OF PRONOUNCEMENT : 29.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-14, MUMBAI, DATED 14.06.2013 FOR A.Y. 2011-12 ON FOLLOWING GROUNDS: ITA NO.5518/MUM/13 A.Y. 11-12 [ITO TDS (OSD) VS. M/S. EXPRESS TRANSPORT P. LTD.] PAGE 2 I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITI ON ON ACCOUNT OF SHORT DEDUCTION OF TDS ON THE PAYMENT MADE TO CENTRAL WAREHOUSING CORPORATION (CWC), CONTAINER FREIGHT STATIONS (CFSS), BOMBAY PORT TRUS T (BPT), AIRPORT AUTHORITIES (AAI), ETC. U/S. 1941 AN D TREATING THE SAME AS T.D.S. PAYMENT U/S. 194C, WITHOUT PROPERLY APPRECIATING THE FACTUAL AND LEGAL MATRIX OF THE CASE, AS CLEARLY BROUGHT OUT IN HIS O RDER U/S 201(1)/201(1A) OF THE INCOME TAX ACT, 1961. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE WAS UNDER NO LIABILITY TO DEDUCT TAX U/S 1 94I OF INCOME TAX ACT 1961 AND DELETING THE SUBSEQUENT DEMAND UNDER THE HEAD CRANE AND FORKLIFT CHARGES DETERMINED BY THE AG VIDE ORDER PASSED U/S 201(1) O F THE ACT WITHOUT APPRECIATING THE FACT THAT THE SAME FALLS WITHIN THE PURVIEW OF SECTION 194I OF THE INC OME TAX ACT, 1961. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DELETING TH E INTEREST U/S 201(1A) OF THE IT ACT, 1961 ON THE SHO RT DEDUCTION OF TAX DETERMINED BY THE AG AS THE TAX DETERMINED HAS ALREADY BEEN DELETED BY HIM AND INTEREST DELETION IS CONSEQUENTIAL TO THE QUANTUM DELETION FOR WHICH FURTHER APPEAL HAS BEEN RECOMMENDED VIDE GROUND NO. I AND II. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CUSTO MS HOUSE AGENT. A SURVEY U/S.133A WAS CARRIED OUT AT THE ASSESSEES PREMISES ON 24.02.2011 FOR VERIFICATION OF RECORDS TO ENSURE THAT ASSESSEE WAS DEDUCTING TAXES AT SOUR CE IN ACCORDANCE WITH LAW. FROM THE INFORMATION GATHERED , IT WAS NOTED THAT ASSESSEE WAS ALLEGEDLY NOT DEDUCTING TAX ES FROM VARIOUS PAYMENTS AT CORRECT PRESCRIBED RATES AND TH EREFORE A NOTICE WAS ISSUED REQUIRING THE ASSESSEE TO SHOW CA USE WHY ITA NO.5518/MUM/13 A.Y. 11-12 [ITO TDS (OSD) VS. M/S. EXPRESS TRANSPORT P. LTD.] PAGE 3 IT SHOULD NOT BE TREATED TO BE AN ASSESSEE-IN-DEFAU LT FOR NOT DEDUCTING TAXES AT SOURCE PROPERLY. ASSESSING OFFI CER AFTER REJECTING THE CONTENTION OF ASSESSEE HELD THAT ASSE SSEE DID NOT DEDUCT TAX AT SOURCE AS PER LAW OR MADE SHORT D EDUCTION OF TAX WHILE MAKING VARIOUS PAYMENTS IN COURSE OF B USINESS. ACCORDINGLY, HE RAISED THE DEMAND OF RS.1,55,63,128 /- AGAINST THE ASSESSEE U/S.201(1)/201(1A) OF THE ACT. 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRA NTED RELIEF TO THE ASSESSEE. SAME HAS BEEN OPPOSED ON B EHALF OF REVENUE INTER ALIA SUBMITTING THAT ORDER OF CIT BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE O RDER OF CIT. 2.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND MATER IAL ON RECORD, WE FIND THAT CIT(A) BY FOLLOWING IMMEDIATEL Y PRECEDING YEAR OBSERVED THAT PAYMENT MADE BY ASSESS EE ON BEHALF OF ITS CLIENTS, REPRESENTED CHARGES PAID IN CONNECTION WITH SERVICES RENDERED FOR OBTAINING CUSTOM CLEARAN CE OF IMPORT/EXPORT OF GOODS. THE PAYMENT WAS NOT MADE F OR MERE USE OF SPACE. AFTER EXAMINING THE PUBLICATIONS OF THE MINISTRY OF COMMERCE, PLANNING COMMISSION AND REGUL ATIONS GOVERNING THE PROCEDURE FOR CUSTOM CLEARANCE, IT WA S CONCLUDED THAT CWC, ICD, CFS, BPT AND AAI AS WERE STATUTORY CUSTODIANS OF GOODS TILL REQUISITE FORMAL ITIES BY ITA NO.5518/MUM/13 A.Y. 11-12 [ITO TDS (OSD) VS. M/S. EXPRESS TRANSPORT P. LTD.] PAGE 4 CUSTOM AUTHORITIES RELATING TO CLEARANCE OF THE GOO DS WERE COMPLETED. TILL THE CUSTOMS CLEARANCE PROCEDURES W ERE COMPLIED WITH, IMPORTER/EXPORTER OF GOODS HAD LEGAL OBLIGATION TO KEEP THE GOODS ONLY WITHIN THE DESIGN ATED AREAS OF THE STATUTORY CUSTODIANS. IN THE MATTER OF COMP LIANCE WITH CLEARANCE PROCEDURES, ASSESSEES CLIENTS DID NOT HA VE ANY OPTION. THE REGULATIONS FRAMED BY THE CUSTOMS DEPA RTMENT PRESCRIBED THE RESPONSIBILITIES OF THE STATUTORY CU STODIANS WHO ARE ALLOWED TO OPERATE WITHIN THE CUSTOMS AREA AND PERMITTED TO HANDLE THE GOODS IN CONFORMITY WITH RE GULATIONS. HAVING CONSIDERED THE ENTIRE STATUTORY FRAMEWORK AN D REGULATIONS CONCERNING HANDLING OF GOODS TILL THE C LEARANCE FORMALITIES ARE COMPLETE, IT HAS BEEN HELD BY CIT(A ) THAT THE CHARGES PAID BY IMPORTER/EXPORTER THROUGH CHA TO TH E STATUTORY CUSTODIANS CANNOT BE CONSIDERED TO BE IN NATURE OF RENT AS DEFINED IN SECTION 194I OF THE ACT. SINC E, THE FACT IN CURRENT YEAR WERE ALSO FOUND IDENTICAL, THEREFORE C IT(A) HELD THAT CHARGED PAID BY ASSESSEE ON BEHALF OF IMPORTER /EXPORTER TO CWC, ICD, CFS, BPT AND AAI DO NOT FALL WITHIN TH E AMBIT OF EXPRESSION RENT AS DEFINED IN EXPLANATION 1 TO SECTION 194I OF THE ACT. ACCORDINGLY, DEMAND IN QUESTION W AS DELETED. IT WAS POINTED OUT ON BEHALF OF ASSESSEE THAT ASSESSEES OWN CASE IN ITA NOS. 1426 TO 1429/MUM/20 13 FOR A.YS. 2008-09 TO 2011-12, SIMILAR ISSUE IS DECI DED IN FAVOUR OF ASSESSEE. NOTHING CONTRARY WAS BROUGHT T O OUR KNOWLEDGE ON BEHALF OF REVENUE. FACTS BEING SIMILA R, SO ITA NO.5518/MUM/13 A.Y. 11-12 [ITO TDS (OSD) VS. M/S. EXPRESS TRANSPORT P. LTD.] PAGE 5 FOLLOWING SAME REASONING, WE ARE INCLINED TO INTERF ERE WITH THE ORDER OF CIT(A). WE UPHOLD THE SAME. 3. AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF JUNE, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 29/06/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. %&%'( ) / CONCERNED CIT 4. )- / CIT (A) 5.-./00'(, '( , %& / DR, ITAT, MUMBAI 6./4567 / GUARD FILE. BY ORDER / , / % , '( , %&