ITO 1(2)(1), MUMBAI V. ITL TOURS & TRAVELS P.LTD, MUMBAI

ITA 5969/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 4008 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 17-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR PADMAPANI BORA
• Keywords: TDS
• Section: 142(1); 40(a)(ia); 201; 143(2); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JM & SHRI S . RIFAUR RAHMAN, AM ./ I.T.A. NO . 5969 / MUM/ 2018 ( / ASSESSMENT YEAR: 20 1 4 - 15 ) I.T.O 1(2)(1) ROOM NO. 536, 5 TH FL., AAYKAR BHAVAN, M.K. ROAD, MUMBAI - 40002 0 . / VS. M/S. ITL TOURS & TRAVELS P.LTD. 1 ST FL., 10 NAZMI BLDG., D.N RD. R.D STREET, FORT, MUMBAI - 400 001. ./ ./ PAN NO. AA BC 12337 L ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI KUMAR PADMAPA N I BORA , DR / RESPONDENTBY : NONE / DATE OF HEARING : 1 6 .12.2019 / DATE OF PRONOUNCEMENT : 20 .12.2019 / O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - 2 IN SHORT REFERRED AS LD. CIT(A), MUMBAI, DATED 04 /0 7 /2018 FOR ASSESSMENT YEAR (IN SHORT AY) 20 1 4 - 15 ON THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 5969 /MUM/2018 A.Y 20 1 4 - 15 M/S. ITL TOURS & TRAVELS P.LTD. - 2 - 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) WAS RIGHT IN DELETING THE ADDITION OF RS. 1,93,99,235/ - MADE BY THE ASSESSING OFFIC ER, ON ACCOUNT OF DISALLOWANCE U/S. 40(A)(IA) OF THE INCOME TAX ACT,1961, IGNORING THE FINDINGS AND JUSTIFICATIONS GIVEN BY THE ASSESSING OFFICER GIVEN IN THE ASSESSMENT ORDER?'. 2. 'WHETHER ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE PROVISIONS OF SECTION 194H ARE NOT APPLICABLE O PAYMENTS MADE BY THE ASSESSEE COMPANY TO ITS INTERMEDIARIES AS COMMISSION FOR BRINGING BUSINESS TO THE ASSESSEE COMPANY?' 3. 'WHETHER ON FACTS AND IN TH E CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CITI WAS JUSTIFIED IN HOLDING THAT THE RELATION BETWEEN THE ASSESSEE AND THE INTERMEDIARIES IS THAT OF PRINCIPAL TO PRINCIPAL AND NOT THAT OF A PRINCIPAL TO AGENT EVEN THOUGH THE INTERMEDIARY BRINGS BUSINESS TO THE ASSESSEE COMPANY AND COMMISSION IS PAID IN FORM OF HANDLING CHARGES?' 2. BRIEF FACTS OF THE CASE ARE THAT THAT ASSESSE COMPANY IS ENGAGED IN OPERATION OF FOREIGN TOURS AND SOLD FOREIGN CURRENCY NOTES/CHEQUES TO THE FOREIGN TRAVELERS. HOWEVER, THE ASSESSEE COMPANY FILED ITS E - RETURN OF INCOME ON 24 - 11 - 2014 FOR THE A.Y 201 4 - 15 , DECLARING TOTAL INCOME OF RS. 21,02,670/ - AND CLAIMED A REFUND OF RS. 19,10,280/ - . THE CASE OF THE ASSESSEE WAS SELECTED UNDER CASS. DURING THE SCRUTINY THE AO ISSUED NOTICE U /S. 143(2) OF THE INCOME - TAX ACT, 1961 ( IN SHORT, THE ACT). THE AO ALSO ISSUED NOTICE U/S. 142(1) OF THE ACT. BOTH THE SAID NOTICES WERE DULY SERVED UPON THE ASSESSEE. IN RESPONSE TO SAID NOTICES ISSUED BY THE AO, ITA NO. 5969 /MUM/2018 A.Y 20 1 4 - 15 M/S. ITL TOURS & TRAVELS P.LTD. - 3 - THE A/R OF THE ASSESSEE APPEARED BEFORE THE AO AND FILED THE COPIES OF ROI, BALANCE SHEET, P & L, COMPUTATION AND ALSO THE DETAILS IN RESPONSE TO NOTICE ISSUED U/S. 142(1) OF THE ACT. ON PERUSAL OF THE DETAILS WITH AUDITED PROFIT & LOSS ACCOUNT, THE AO OBSERVED THAT THE ASSESSEE HAS CLAIM ED THE EXPENSES TOWARDS DISCOUNT (DOMESTIC OF RS.11,94,328/ - ) AND DISCOUNT (INTERNATIONAL OF RS. 2,00,61,582/ - ). DETAILS/ BREAK UP OF SUCH EXPENDITURE OF RS. 2,12,55,910/ - ARE GIVEN IN PARA 7.2 , AT PAGE - 3 OF THE ASSESSMENT ORDER 2,12,55,910/ - BY THE AO . O N EXAMINATION OF SAID DETAILS OF EXPENDITURE OF RS. 2,12,55,910/ - THE AO ASKED THE ASSESSEE TO PROVIDE DETAILS OF TDS DEDUCTION ON SUCH PAYMENT/EXPENDITURE OF RS.2,12,55,910/ - . IN RESPONSE, THE ASSESSEE VIDE ITS SUBMISSION DT. 19 - 08 - 2016 HAS EXPLAINED THE SAME IN DETAIL ALONG WITH AN EARLIER ORDER OF ITAT, I BENCH, MUMBAI , IN ASSESSEES OWN CASE, WHEREIN IT WAS HELD THAT NO TDS IS REQUIRED TO BE DEDUCTED ON HANDLING CHARGES/DISCOUNT PAID FOR THE A.YS 2006 - 07 TO 2010 - 11 AND THE LD. CIT(A) HAS ALSO HELD IN FAVOUR OF ASSESSEE FOR A.YS 2010 - 11 TO 2012 - 13. THE DETAILS OF ASSESSEES EXPLANATION HAS BEEN REPRODUCED BY THE AO IN HIS ORDER IN PARA 7.1 AT PAGES 3 - 4 OF THE ASSESSMENT ORDER. THE AO FOUND THAT THE ASSESSEE HAS DEDUCTED TDS OF ITA NO. 5969 /MUM/2018 A.Y 20 1 4 - 15 M/S. ITL TOURS & TRAVELS P.LTD. - 4 - RS. 127,675/ - ON EXPENSES OF RS. 12,75,218/ - AND BALANCE AMOUNT OF RS. 1,93,99,235/ - AS INCURRED ON ACCOUNT OF COMMISSION EXPENSES, THE TDS WAS NOT PAID BY THE ASSESSEE AND AS SUCH, HE MADE A DISALLOWANCE U/S. 40(A)(IA) OF THE ACT OF RS. 1 ,49,47,949/ - AND ADDED THE SAME TO THE TOT AL INCOME OF THE ASSESSEE 3. AGGRIEVED WITH THE ORDER OF THE A.O THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) BY CONSIDERING THE EARLIER ORDER OF ITAT MUMBAI BENCH IN ASSESSEES OWN CASE FOR THE A.YS 2006 - 07 TO 2013 - 14 EXCEPT AY 2007 - 08) DIRECTED THE AO TO DELETE THE IMPUGNED ADDITION BY OBSERVING THEREFORE, FACT BEING BROADLY THE SAME, RESPECTFULLY FOLLOWING BINDING JUDICIAL PRECEDENT, WE CONFIRM THE STAND OF LD. CIT(A) AND DISMISS THIS GROUND OF RE VENUES APPEAL. 4. AGGRIEVED WITH THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US AND RAISED THE AFOREMENTIONED GROUNDS OF APPEAL . 5. A FTER HEARING THE LD. DR AND PERUSING THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ISSUE INVOLVED IN THE APPEAL IS SQUARELY COVERED IN FAVOUR OF ASSESSEE AND AGAINST ITA NO. 5969 /MUM/2018 A.Y 20 1 4 - 15 M/S. ITL TOURS & TRAVELS P.LTD. - 5 - THE REVENUE BY THE EARLIER ORDER OF ITAT MUMBAI [ IN ASSESSEES OWN CASE STARTING FROM AY 2006 - 07 TO AY 2013 - 14, EXCEPT AY 2007 - 08 ]. TH US, THE LD. CIT(A) FOLLOWING THE SAME HAS RIGHTLY DIRECTED THE AO T O DELETE THE IMPUGNED ADDITION AS MADE BY THE AO ON THIS COUNT. WE UPHOLD THE SAME. THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 20 /12 /201 9 . SD/ - SD/ - ( SAKTIJIT DEY ) ( S RIFAUR RAHMAN ) (JUDICIAL MEMBER) ACCOUNTANT MEMBER MUMBAI, DATED 20 / 12 /20 1 9 **PP,S PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// 1. / ( ASST. REGISTRAR) , / ITAT, MUMBAI