The ITO, Ward-10(4), Ahmedabad V. Shri Pritesh D.Shah(HUF), Ahmedabad

ITA 625/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9490 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 03-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A C SHAH
• Section: 143(3); 194C

Judgement Text

ITA NO. 625 /AHD/201 4 A SSESSMENT YEAR: 20 1 0 - 11 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 625 / AHD / 2 0 1 4 ASSESSMENT YEAR: 20 10 - 11 INCOME TAX OFFICER, WARD 10(4), AHMEDABAD. ....... .. . .....APPELLANT VS. PRITES H D SHAH (HUF), ............................RESPONDENT PROP. KASHYAP SHIPPING AGENCY, 11, KALINDI COMPLEX, OPP. OLD HIGH COURT, AHMEDABAD 380 009. [ PAN AA NHS 6430 F ] APPEARANCES BY: JAMES KURIAN, FOR THE APPELLANT A.C. SHAH FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 0 2 . 01 .201 7 DATE OF PRONOUNCING THE ORDER : 03 . 01.2017 O R D E R PER PRAMOD KUMAR , AM: 1. BY WAY OF THIS APPEAL, THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 16 TH DECEMBER, 2013 PASSED BY T HE LD. CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 20 10 - 11 , ON THE FOLLOWING GROUND S : - (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.3,27,35,109/ - , RS.1,91,44,649/ - AND RS.9,08,767/ - MADE U/S. 40(A)(IA) OF THE ACT WITHOUT CONSIDERING THE FACT THAT THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT WITHOUT CONSIDERING THE FACT THAT THE PROVISIONS OF SECTION 40(A)(IA) R.W.S. 194C & 194I O F THE ACT ARE SQUARELY APPLICABLE TO THE FACTS OF THE ASSESSEE S CASE AND THE DISALLOWANCE HAVE CORRECTLY BEEN MADE BY THE AO. ITA NO. 625 /AHD/201 4 A SSESSMENT YEAR: 20 1 0 - 11 PAGE 2 OF 3 (2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESSING O FFICER. (3) IT IS THEREFORE PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE ORDER OF THE ASSESSING O FFICER BE RESTORED TO THE ABOVE EXTENT. 2. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE ISSUE IN APPEAL IS NOW COVERED, IN FAVOUR OF THE ASSESS EE, BY A CO - ORDINATE BENCH S DECISION IN ASSESSEE S OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR. VIDE THIS DECISION DATED 0 4.10.2013 , THE TRIBUNAL HAS, INTER ALIA, OBSERVED AS FOLLOWS : - 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDER OF THE A.O. AND CIT(A) AND COPIES OF VARIOUS DOCUMENTS AND DETAILS FILED IN THE COMPILATION BEFORE US. WE FIND THAT THE ASSESSEE IS ONLY A CLEARING & FORWARDING AGENT AND HAS CHARGED ITS SERVICE CHARGES KNOWN AS AGENCY CHARGES FROM ITS CLIENTS WHOSE GOODS ARE EXPORTED THROUGH VARIOUS PORTS MAINLY IN GUJARAT & MAHARASHTRA. THE ASSESSEE HAS RECEIVED THE RAILWAY FREIGHT, SHIPPING FREIGHT, ICD CHARGES ETC. FROM ITS CLIENTS BY WAY OF REIMBURSEMENT OF EXPENSES. ACCORDINGLY, THE ASSESSEE IS MERELY A FA CILITATOR IN THE EXPORT BUSINESS OF ITS CLIENTS AND HAS RECEIVED THE REIMBURSEMENT OF EXPENSES INCURRED AND SERVICE CHARGES IN THE NAME OF AGENCY CHARGES FROM ITS CLIENTS. THESE FACTS COULD NOT BE CONTROVERTED ON BEHALF OF THE REVENUE BEFORE US. WE FIND TH AT THE RECEIPTS WERE ISSUED BY THE VARIOUS PARTIES IN THE NAME OF CLIENTS OF THE ASSESSEE AND NOT IN THE NAME OF THE ASSESSEE. ON THE PERUSAL OF THE COPY OF THE AUDITED ACCOUNTS, IT SHOWS THAT THE ASSESSEE HAS RECEIVED AND CREDITED TO ITS P&L ACCOUNT AGENC Y CHARGES APART FROM THE REIMBURSEMENT OF EXPENSES INCURRED ON BEHALF OF ITS CLIENTS. WE FIND THAT THE ASSESSEE FACILITATES TO AND FRO MOVEMENT OF CLIENT S GOODS BOTH IN LAND AND OVERSEAS, USING ROAD, RAIL, AIR AND SEA ROUTES INCLUDING TEMPORARY STORAGE OF THE GOODS IN CUSTOM BOUNDING WAREHOUSES FOR LEGAL AND PROCEDURAL PURPOSES ETC. FOR THE APPLICABILITY OF PROVISION OF SECTION 194C & 194I, THE RELATIONSHIP OF CONTRACTOR AND PAYEE PURSUANT TO CONTRACT BETWEEN THE PARTIES IS ESSENTIAL. IN THE CASE BEFORE US , NO SUCH RELATIONSHIP HAS BEEN FOUND. THE CIT(A) HAS GIVEN THE FINDING THAT THE CLIENTS OF THE ASSESSEE ARE REIMBURSING AMOUNT OF MONIES PAID BY THE ASSESSEE TO SUCH AGENCIES ALONG WITH THE ASSESSEE S COMMISSION OR HANDLING CHARGES. THE CIT(A) HAS REFERRE D TO NUMBER OF DECISIONS WHEREIN THE HON BLE COURTS HELD THAT TDS PROVISIONS ARE NOT ATTRACTED IN CASES INVOLVING REIMBURSEMENT OF EXPENSES. IN THESE FACTS OF THE CASE, WE FIND THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN HOLDING THAT THE ADDITIO N ON ACCOUNT OF PAYMENTS, MADE TO VARIOUS PARTIES ON BEHALF OF ITS CLIENTS BY THE ASSESSEE COULD NOT BE SUSTAINED AND DESERVES TO BE DELETED. ACCORDINGLY, THE ORDER OF THE CIT(A) IS CONFIRMED AND GROUND OF THE REVENUE S APPEAL IS DISMISSED. ITA NO. 625 /AHD/201 4 A SSESSMENT YEAR: 20 1 0 - 11 PAGE 3 OF 3 3. WE SEE NO R EASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO - ORDINATE BENCH. 4. RESPECTFULLY FOLLOWING THE TRIBUNAL S DECISION DATED 0 4 .1 0 .201 3 , IN ASSESSEE S OWN CASE FOR THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, WE CONFIRM THE ORDER OF T HE LD. CIT(A) AND DISMISS THE GROUNDS RAISED BY THE REVENUE . 5. IN THE RESULT, THE APPEAL IS DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 3 RD D AY OF JANUARY, 2017 . SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 3 RD DAY OF JANUARY , 201 7 COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD