ACIT, UDAIPUR V. Shree Rajasthan Syntex Ltd., UDAIPUR

ITA 555/JODH/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78120 (ITAT-JODHPUR)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-03-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 09-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR DEEPAK SEHGAL
• Section: 115JB; 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 555/JU/2013 ASSESSMENT YEAR: 2009-10 THE A.C.I.T VS. SHREE RAJASTHAN SYNTEX LTD CIRCLE- 2 PULLA BHUWANA ROAD UDAIPUR N.H. -8, UDAIPUR PAN NO. AACCS 8784 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MAHESH GEHLOT DEPARTMENT BY : DR. DEEPAK SEHGAL, CIT, DR DATE OF HEARING : 03.03.2014 DATE OF PRONOUNCEMENT : 02.04.2014 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE CIT(A), UDAIPUR, DATED 12.09.2013 FOR A.Y 2009-2010. 2 2. THE SOLE ISSUE RAISED IN THIS APPEAL READS AS UN DER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWAN CE OF RS. 1,55,45,150/- MADE BY THE A.O. U/S 40(A)(IA) OF THE ACT IGNORING THE FACT THAT THE ASSESSEE HAS FAILED TO DEDUCT THE TAX ON THE PAYMENTS MADE TO CLEARING AND FORWARDING AGENTS AS PER PROVISIONS OF SECTION 194C OF THE ACT READ WITH BOARDS CIRCULAR NO. 715 DATED 8.8.1995 AND MOREOVER, THE C & F AGENT IS NEITHER NON-RESIDENT OWNER NOR AN AGENT ACTING ON BEHALF OF A NON-RESIDENT SHIP OWNER AND THEREBY CIRCULAR NO. 723 IS NOT AT ALL APPLICABLE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD. F OR A.Y. 2009-2010, THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME [ROI] ON 29.9.2009 AT RS. NIL. THE ASSESSEE - COMPANY MANUFACTURES SPUN YARN AND FILAMENT YARN. IT HAS DECLARED GROSS TOTAL NEGATIVE INCOME OF RS. 17,33,8 7,108/- BEFORE BROUGHT FORWARD LOSSES. THE ASSESSEE HAS DE CLARED BOOK PROFITS U/S 115JB OF THE INCOME-TAX ACT, 1961 3 [HEREINAFTER REFERRED TO AS 'THE ACT', FOR SHORT] AT RS. 70,87,639/- AFTER ADDING INCOME-TAX OF EARLIER YEAR S OF RS. 15,22,86,275/- AND DEFERRED TAX RS. 33,76,780/- AND OFFERING RS. NIL AS MAT TAX U/S 115JB OF THE ACT. HOWEVER, THE A.O. MADE ADDITION OF RS. 1,55,45,150/ - U/S 40(A)(IA) OF THE ACT AS THE ASSESSEE HAS NOT DEDUCT ED TDS ON PAYMENTS MADE TO THE CLEARING AND FORWARDING AGE NTS. AGAINST THIS ADDITION, THE ASSESSEE PREFERRED APPEA L AND THE LD. CIT(A) FOUND THE ISSUE TO BE COVERED IN FAV OUR OF THE ASSESSEE BY THE ORDER OF HIS PREDECESSOR PASSED FOR A.YS. 2005-06 TO 2007-08. 4. BEFORE US, IT WAS SUBMITTED AT THE VERY OUTSET O F THE OPENING OF THE HEARING OF THIS CASE THAT THIS ISSUE STANDS SQUARELY COVERED BY THE ORDER OF THIS BENCH RENDERE D IN ASSESSEES OWN CASE. A COPY OF THE TRIBUNAL ORDER DATED 13.11.2013 HAS BEEN ENCLOSED AT PAGES 26 ONWARDS OF THE PAPER BOOK. 4 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE ENTIRE MATERIAL ON RECORD AS WELL AS THE TRIBUNAL ORDER AND ARE SATISFIED THAT THIS ISSU E STANDS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE VIDE ORD ER DATED 13.11.2013 FOR A.Y. 2006-07 IN ASSESSEES OWN CASE. THIS FACT WAS ALSO CONCURRED BY THE LD. D.R. DURING THE COURSE OF HEARING. THEREFORE, AFTER EXTRACTING THE FOLLOWING RELEVANT PORTION FROM INTERNAL PAGE 5 OF THE TRIBUNAL ORDER [PAGE 30], WE DECLINE TO INTERFERE W ITH THE FINDING OF THE LD. CIT(A) WHO HAS SIMPLY FOLLOWED T HE TRIBUNAL ORDER: 39 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE I MPUGNED AMOUNT WAS PAID BY THE ASSESSEE ON ACCOUNT OF SEA FREIGHT, TO THE AGENTS OF NON-RESIDENT SHIP OWNERS. THEREFORE NO TDS WAS TO BE DEDUCTED UNDER SECTION 194C OR SECTION 195 OF THE A CT AS SUCH THE DISALLOWANCE MADE BY THE ASSESSING OFFICER BY I NVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, WAS NOT JUSTIFIED AND THE LEARNED CIT(A) RIGHTLY DELETED THE ADDITION MAD E BY THE ASSESSING OFFICER BY CONSIDERING THE CIRCULAR NO. 7 23 DATED 19/12/1995 ISSUED BY THE CBDT. THE PRESENT ISSUE I S ALSO COVERED BY THE DECISION OF THIS BENCH OF THE TRIBUN AL IN THE CASE OF ACIT VS. MINPRO INDUSTRIES (SUPRA) WHEREIN IT HAS B EEN HELD THAT REIMBURSEMENT OF THE PAYMENT TOWARDS SEA FREIGHT TR ANSPORT, CCI CHARGES, STEAMER FREIGHT CHARGES AND REPO CONTAINER CHARGES MADE BY THE ASSESSEE TO THE C & F AGENTS WHO HAVE A LREADY 5 MADE THE PAYMENT ON BEHALF OF THE ASSESSEE WAS COVE RED BY THE PROVISIONS OF SECTION 172 OF THE ACT AND NOT BY SEC TION 194C OR SECTION 195 AND THAT THE AGENT HAVING ALREADY DEDUC TED TDS FROM THE TRANSPORTATION CHARGES AND SHIPPING BILL B EFORE MAKING THESE PAYMENTS TO THE PRINCIPAL WHICH HAVE BEEN REI MBURSED BY THE ASSESSEE, THE ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM SUCH PAYMENTS AND CONSEQUENTLY, SAME COULD NOT BE DISALLOWED BY INVOKING THE PROVISIONS OF SECTION 40 (A)(IA) OF THE ACT. ACCORDINGLY, WE DISMISS THE GROUND RAISED BY THE RE VENUE. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 02.04.2014. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 ND APRIL, 2014 VL/- COPY TO: THE APPELLANT THE RESPONDENT THE CIT BY ORDER THE CIT(A) THE DR ASSISTANT REGISTRAR ITAT, JODHPUR