DCIT, CHENNAI V. Delta Shoes P. Ltd., CHENNAI

ITA 723/CHNY/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73793 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 19-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2013
• Court: TRIBUNAL
• Department Lawyers: T N BETGERI
• Assessee Lawyers: S RIFAUR RAHMANCA
• Keywords: Bonafide belief; Non-deduction of tax

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNALC BENCH, CHEN NAI . , , ! ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER . / I.T.A. NO. 723/MDS/2013 / ASSESSMENT YEAR : 2008-09 DY. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(4), CHENNAI ( # /APPELLANT) VS M/S.DELTA SHOES P. LTD., NO.151/4, MOUNT POONAMALLEE ROAD, CHENNAI-89 [PAN: AAACD 1292 J] ( $% # /RESPONDENT) / APPELLANT BY : SHRI T.N.BETGERI, JCIT / RESPONDENT BY : SHRI S.RIFAUR RAHMAN,CA., / DATE OF HEARING : 19-03-2014 ! / DATE OF PRONOUNCEMENT : 21-03-2014 & / O R D E R PER VIKAS AWASTHY, J.M: THE APPEAL HAS BEEN FILED BY THE REVENUE IMPUGNING THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IX , CHENNAI DATED 28-01-2013 RELEVANT TO THE ASSESSMENT YEAR (A Y) 2008-09. 2. IN APPEAL, THE REVENUE HAS ASSAILED THE FINDINGS OF THE CIT(APPEALS) DELETING DIS-ALLOWANCE U/S.40(A)(I) OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE ACT) I N RESPECT OF OVERSEAS AGENCIES COMMISSION PAID TO NON-RESIDENTS WITHOUT DEDUCTING TAX AT SOURCE. I.T.A. NO. 723/MDS/2013 2 3. THE ASSESSEE-COMPANY IS ENGAGED IN THE MANUFACTU RE OF SHOE UPPERS. THE ASSESSEE FILED ITS RETURN OF INCO ME FOR THE AY.2008-09 ON 29-09-2008 DECLARING INCOME OF ` 1,00,32,580/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE ON 24- 09-2009. THE ASSESSING OFFICER MADE DIS-ALLOWANCE INTER-ALIA ON ACCOUNT OF COMMISSION PAID BY ASSESSEE TO OVERSEAS AGENTS WHO PROCURED ORDERS AND ENSURE REALIZATION OF EXPORTS ON THE ORD ERS PROCURED BY THEM. THE ALLEGED SERVICES ARE RENDERED OUTSIDE IN DIA. AGGRIEVED AGAINST THE ASSESSMENT ORDER, THE ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(APPEALS). THE C IT(APPEALS) VIDE IMPUGNED ORDER DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF THE CIT(APPEALS) ON THE I SSUE. 4. SHRI S.RIFAUR RAHMAN, C.A., APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT THE ISSUE IN APPEAL HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.909/MDS/2013 RELEVANT TO THE AY.2009-10 DECIDED ON 31-07-2013. THE TRIBUNAL HELD THAT THE ASSESSEE HA D EVERY REASON TO HOLD A BONAFIDE BELIEF THAT THE PAYMENTS MADE TO NON-RESIDENTS WERE NOT CHARGEABLE TO TAX. THUS, T HE ASSESSEE I.T.A. NO. 723/MDS/2013 3 CANNOT BE FASTENED WITH THE CONSEQUENCES ARISING OU T OF NON- DEDUCTION OF TAX. 5. SHRI T.N.BETGERI, APPEARING ON BEHALF OF THE REV ENUE FAIRLY STATED THAT THE ISSUE IN APPEAL HAS BEEN ADJUDICATE D IN FAVOUR OF THE ASSESSEE IN THE APPEAL OF THE REVENUE IN ITA NO.909/MDS/2013 (SUPRA). 6. BOTH SIDES HEARD. WE HAVE EXAMINED THE ORDERS O F THE AUTHORITIES BELOW AND PERUSED THE ORDER OF THE CO-O RDINATE BENCH OF THE TRIBUNAL IN ITA NO.909/MDS/2013 RELEVANT TO THE AY.2009-10 (SUPRA), WHEREIN THE IDENTICAL ISSUE IN THE CASE OF THE ASSESSEE FOR THE AY.2009-10 HAS BEEN DECIDED BY THE TRIBUNAL. I N THE AFORESAID APPEAL OF THE REVENUE, THE TRIBUNAL HAS G IVEN A CATEGORIC FINDING THAT NO DIS-ALLOWANCE IS TO BE MA DE IN THE CASE OF ASSESSEE FOR NON-DEDUCTION OF TAX ON PAYMENT OF AGE NCY COMMISSION TO FOREIGN AGENTS FOR PROCURING EXPORT O RDERS. RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL, WE DISMISS THE APPEAL OF THE REVENUE. ORDER PRONOUNCED ON FRIDAY, THE 21 ST MARCH, 2014 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (VIKAS AWASTHY) JUDICIAL MEMBER DATED: 21 ST MARCH, 2014 TNMM COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR