INCOME TAX OFFICER, WARD-5(2)(1), MUMBAI V. M/S. IAL SHIPPING AGENCIES (MUMBAI)LTD., MUMBAI

ITA 6579/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 9372 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Next Hearing Date: 04-01-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 12-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS APARNA AGARWAL
• Assessee Lawyers: R R SHAR MA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I, MUMBAI. BEFORE SHRI SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMB ER AND SHRI V.D. RAO, JUDICIAL MEMBER. I.T.A. NO. 65 79/MUM/2008 ASSESSMENT YEAR : 2005-06. THE INCOME TAX OFFICER, VS. M/S IA L SHIPPING AGENCIES 5(2)(1), MUMBAI. (MUMBAI) LTD., 6 TH FLOOR, KALPATARU COURT, C. GIDWANI MARG, CHEMBUR, MUMBAI 400074. PAN : AAACM 3123B APPELLANT RESPONDENT APPELLANT BY : MRS. APARNA AGARWAL. RESPONDENT BY : SHRI R.R. SHAR MA. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED A GAINST THE ORDER OF THE CIT(APPEALS) DATED 12-9-2008 FOR THE A SSESSMENT YEAR 2005- 06 ON THE FOLLOWING TWO EFFECTIVE GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT THE ASSESSEE IS NOT THE PRINCIPAL BUT AN AGENT ONLY AND DELETING ALL DELETIONS TO INCOME MADE BY A.O. OF INCOME ARISING FROM THE ACTIVITIES OF IAL CONTAINER LINES (UK) LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND AS PER LAW, THE LD. CIT(A) ERRED IN GIVING RELIEF TO ADDITIONS OF I MPORT AGENCY COMMISSION AT RS.3,40,793/-. 2. AT THE TIME OF HEARING BOTH PARTIES SUBMITTED T HAT SIMILAR ISSUE HAS COME UP BEFORE THE L-BENCH OF THE TRIBUN AL IN THE ASSESSEES 2 OWN CASE FOR THE ASSESSMENT YEARS 2001-02 TO 2003-0 4 IN ITA NOS. 3910/MUM/2005, ITA NO. 7070/MUM/2005 AND ITA NO. 25 7/MUM/2007 ORDER DATED 27 TH AUGUST, 2008 WHEREIN IDENTICAL GROUNDS RAISED BY T HE REVENUE WERE DISMISSED BY THE TRIBUNAL. 3. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERA TION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT T HE ASSESSEE IS AN AGENT IN THE SHIPPING COMPANY. THE AO HELD THAT THE ASSES SEE COMPANY IS AN INDEPENDENT COMPANY AND NOT AN AGENT. FURTHER, CERT AIN ADHOC DISALLOWANCE HAVE BEEN MADE. THIS BENCH OF THE TRIB UNAL IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR S IN ITA NO. 4157/MUM/2005 AND OTHERS CONSIDERED THE QUESTION WH ETHER THE ASSESSEE IN THESE CASES ARE TO BE TREATED AS AGENT OF IAL CO NTAINER LINES (UK) LTD. OR PRINCIPALS THEMSELVES. AT PARA 25 THE CONC LUSIONS OF THE CIT(APPEALS) WERE TAKEN INTO CONSIDERATION AND THER EAFTER AT PARA 27 THE TRIBUNAL TOOK INTO CONSIDERATION VARIOUS FACTORS LI STED THEREIN AND AT PARA 27.1 IT HELD AS FOLLOWS : 27.1 THUS, ON THESE FACTUAL MATRIX AND AS THE LEA RNED DEPARTMENTAL REPRESENTATIVE COULD NOT REFUTE THE FI NDINGS OF THE FIRST APPELLATE AUTHORITY, WE UPHOLD HIS FINDINGS AND HOL D THAT THE ASSESSEE COMPANIES IN THESE CASES ARE MERE AGENTS O F THE UK COMPANY AND THE ASSESSING OFFICER HAD NO EVIDENCE W HATSOEVER TO HOLD OTHERWISE AND THE DECISIONS OF THE ASSESSING O FFICER WERE BASED MERELY ON SURMISES AND CONJECTURES. THUS WE U PHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY AND DISMISS THIS GROUND OF THE REVENUE IN ALL THE APPEALS FILED BY THEM. 4. RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF T HE TRIBUNAL, WE DISMISS GROUND NO. 1 OF THE REVENUE. 5. SIMILARLY, GROUND NO. 2 HAS TO BE DECIDED IN FA VOUR OF THE ASSESSEE AS THE ASSESSEE COMPANY IS ONLY AN AGENT A ND THE ASSESSEE 3 ACCOUNTED ITS AGENCY INCOME AS PER THE AGENCY AGREE MENT WITH IALCL, UK AT THE RATE OF 2.5 OF BASIC IMPORT FREIGHT AND 5 % OF BASIC IMPORT FREIGHT. IN VIEW OF OUR FINDING ON THE FIRST ISSUE, WE UPHOLD THE ORDER OF THE CIT(APPEALS) AND DISMISS THIS GROUND OF THE REV ENUE. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 19 TH DAY OF JANUARY, 2010. SD/- SD/- (V.D. RAO) (J. SUDHAKARY REDDY) JUDICIAL MEMBER. ACCOUNTANT MEMBER. MUMBAI, DATED : 19 TH JANUARY, 2010. WAKODE COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, I-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES