M/s. Orchid Marine, Alappuzha V. The ITO, Alappuzha

ITA 802/COCH/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7242 (ITAT-COCHIN)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 23-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: C B M WARRIER
• Keywords: Non-deduction of tax
• Section: 40A(3)

Judgement Text

1 ITA NO. 802/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI CHANDRA PO OJARI (AM) I.T.A NO. 802/COCH/2013 (ASSESSMENT YEAR 2008-09) M/S ORCHID MARINE VS ITO, WD.3 ANWAR PALACE, CHANDIROOR ALAPPUZHA CHERTHALA, ALAPPUZHA PAN : AAAFO7939C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CBM WARRIER RESPONDENT BY : SHRI M ANIL KUMAR, CIT / SMT. LATHA V KUMAR, JR DR DATE OF HEARING : 05-08-2014 DATE OF PRONOUNCEMENT : 24-09-2014 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-IV, KOCHI AND PERTAINS TO ASSESSMENT YEAR 20 08-09. 2. THE FIRST GROUND OF APPEAL IS WITH REGARD TO DIS ALLOWANCE OF RS.1,42,772 U/S 40(A)(IA) OF THE ACT. 2 ITA NO. 802/COCH/2013 3. SHRI CBM WARRIER, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER DISALLOWED RS.1,42,772 U /S 40(A)(IA) IN RESPECT OF PAYMENT FOR CONSUMPTION TESTING FEES. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD T O DEDUCT TAX U/S 194J OF THE ACT. THE CIT(A) REJECTED THE CLAIM OF THE ASSE SSEE ON THE GROUND THAT THE ASSESSEE ADMITTED THE DISALLOWANCE. THE LD.REP RESENTATIVE EXPLAINED THAT MERELY BECAUSE THE ASSESSEE ADMITTED BEFORE TH E ASSESSING OFFICER THAT CANNOT BE A REASON TO CONFIRM THE ORDER OF ASS ESSING OFFICER. THE CIT(A) HAS TO ADJUDICATE THE ISSUE ON MERIT. ON A QUERY FROM THE BENCH WHETHER THE ASSESSEE ADMITTED FOR THE DISALLOWANCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER , THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT HE IS NOT AWARE OF THE EXACT THING. THE ASSESSEE MAY BY IGNORANCE HAVE ADMITTED FOR DISALLO WANCE. WE HEARD SHRI M. ANIL KUMAR, THE LD.DR. 4. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF TH E ASSESSEE ON THE GROUND THAT THE ASSESSEE COULD NOT OFFER ANY EXPLAN ATION FOR FAILURE TO DEDUCT TAX U/S 194J IN RESPECT OF PAYMENT MADE FOR CONSUMPTION TESTING FEE. THE CIT(A) FOUND THAT THE ASSESSEE AGREED FOR DISALLOWANCE AND ADMITTED THAT HE WOULD NOT PREFER ANY APPEAL ON THA T GROUND. THOUGH THE LD.COUNSEL FOR THE ASSESSEE CLAIMS THAT HE COULD NO T CONFIRM WHETHER THE ASSESSEE ADMITTED FOR DISALLOWANCE, HE EXPLAINED TH AT EVEN AFTER IT WAS 3 ITA NO. 802/COCH/2013 ADMITTED BEFORE THE ASSESSING OFFICER BECAUSE OF IG NORANCE THAT CANNOT BE A REASON TO CONFIRM THE ORDER OF THE ASSESSING OFFI CER. IT IS WELL SETTLED PRINCIPLES OF LAW THAT ONCE THE ASSESSEE ADMITTED F OR DISALLOWANCE BEFORE THE ASSESSING OFFICER ON FACTS, THE SAME CANNOT BE REAGITATED BEFORE THE APPELLATE AUTHORITIES. IF IT IS NOT ADMITTED, THEN , IT IS OPEN TO THE ASSESSEE TO FILE AN AFFIDAVIT BEFORE THE APPELLATE FORUM EXP LAINING THE CIRCUMSTANCES AND ON THAT BASIS THE APPELLATE FORUM MAY CALL FOR EXPLANATION FROM THE CONCERNED OFFICER AS TO HOW HE RECORDED A FINDING T HAT THE ASSESSEE ADMITTED FOR DISALLOWANCE. IN THIS CASE, NO SUCH A FFIDAVIT IS FILED. THE LD.REPRESENTATIVE FOR THE ASSESSEE ALSO HAS A DOUBT WHETHER SUCH ADMISSION WAS MADE OR NOT? IN THE ABSENCE OF ANY D ETAILS AND THE AFFIDAVIT FROM THE ASSESSEE, THIS TRIBUNAL DO NOT F IND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DISA LLOWANCE OF RS. 17,01,500 U/S 40A(3) OF THE ACT. 6. SHRI CBM WARRIER, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER FOUND THAT THE ASSESSEE MADE CASH PURCHASES EXCEEDING RS.20,000 TO THE EXTENT OF RS.17,01,500 F ROM SEVEN PARTIES. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT THERE IS A HUGE DEMAND FOR SEAFOOD ITEMS PARTLY FOR VARIOUS VARIETI ES OF FISHES. WHEN THE 4 ITA NO. 802/COCH/2013 ASSESSEE WAS FACING EXCEPTIONAL DEMAND FOR FISH PRO DUCTS THE ASSESSEE WAS FORCED TO MAKE CASH PURCHASES FROM THE FISHERME N. THE LD.REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTE D THAT CBDT IN CIRCULAR NO.10/2008, CLARIFIED THAT THE PAYMENT TO HEADMAN O F FISHERMEN WHO IS COLLOQUIALLY KNOWN AS MOOPAN, VALLAKAAR, HEADMAN, T HARAKAN, ETC. ARE TO BE TREATED AS PAYMENT MADE TO FISHERMAN. ACCORDING TO THE LD.REPRESENTATIVE, THE PAYMENT WAS MADE TO THE PERS ON / HEADMAN WHO SORT THE FISH AT THE SEA SHORE. THE ASSESSING OFFI CER ASKED THE ASSESSEE TO PRODUCE SEVEN PARTIES FROM WHOM THE FISH WAS PURCHA SED ON CASH PAYMENT. THE ASSESSEE EXPLAINED THAT PRODUCTION OF THE PARTIES WAS BEYOND ITS CONTROL. MERELY BECAUSE THE ASSESSEE CO ULD NOT PRODUCE THE FISHERMEN FROM WHOM THE FISH WAS PURCHASED, ACCORDI NG TO THE LD.REPRESENTATIVE, THERE CANNOT BE ANY DISALLOWANCE . THE LD.REPRESENTATIVE PLACED RELIANCE ON THE JUDGMENT OF THE KERALA HIGH COURT IN INTERSEAS SEAFOOD EXPORTERS (2010) 188 TAXMAN 343 (KER). THE ASSESSEE FILED COPY OF THE JUDGMENT. THE LD.REPRESENTATIVE HAS AL SO PLACED RELIANCE ON THE CIRCULAR ISSUED BY THE CBDT IN CIRCULAR NO.10/2 008 DATED 05-12-2008, COPY OF WHICH IS AVAILABLE AT PAGE 18 OF THE PAPER BOOK. 7. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT THE ASSESSEE PURCHASED FISH FROM MIDDLEMEN, WHO ARE KNO WN AS THARAKANS. ACCORDING TO THE LD.DR, FROM THE VERY SAME THARAKAN THE ASSESSEE 5 ITA NO. 802/COCH/2013 PURCHASED FISH TO THE EXTENT OF RS. 1,66,59,325 AND MADE THE PAYMENT BY CHEQUE DURING THE YEAR UNDER CONSIDERATION. THEREF ORE, NOTHING PREVENTED THE ASSESSEE FROM PAYING THIS AMOUNT OF RS.17,01,50 0 ALSO THROUGH ACCOUNT PAYEE CHEQUE. THE ASSESSEE ALSO COULD NOT PRODUCE THE PARTY FOR EXAMINATION TO FIND OUT WHETHER THEY WERE PRODUCERS OR TRADERS OR THEY WERE MIDDLEMEN. FROM THE EXPLANATION OF THE ASSESS EE, ACCORDING TO THE LD.DR, THE FISH WAS PURCHASED FROM MIDDLEMEN / THAR AKAN, THEREFORE, THE PAYMENT MADE TO THARAKAN WAS RIGHTLY DISALLOWED U/S 40A(3). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADMITTED LY, THE ASSESSEE PURCHASED FISH BY PAYING CASH EXCEEDING RS.20,000. WE HAVE CAREFULLY GONE THROUGH THE CIRCULAR ISSUED BY CBDT IN CIRCULA R NO.10/2008 DATED 05- -12-2008 WHICH READS AS FOLLOWS: CLARIFICATION REGARDING THE MEANING OF THE EXPRESSION FISH OR FISH PRODUCTS USED IN SUB- CLAUSE (III) OF CLAUSE (F) OF RULE 6DD OF THE INCOME-TAX RULES, 1962 CIRCULAR NO.10/2008, DATED 05-12-2008 REPRESENTATIONS HAVE BEEN RECEIVED FROM VARIOUS QUA RTERS REGARDING PROBLEMS BEING FACED BY THE SEAFOOD EXPOR TERS MAINLY ON ACCOUNT OF PROVISIONS OF SECTION 40A(3) O F THE INCOME-TAX ACT, 1961. 6 ITA NO. 802/COCH/2013 2. DISALLOWANCE OF EXPENDITURE UNDER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 40A OF THE I.T. ACT, 196 1 IS MADE IN THE COMPUTATION OF INCOME IN A CASE WHERE A PAYMENT OR AGGREGATE OF PAYMENTS EXCEEDING TWENTY THOUSAND RUP EES IS MADE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACC OUNT PAYEE CHEQUE DRAWN ON A BANK OR BY AN ACCOUNT PAYEE BANK DRAFT EXCEEDING TWENTY THOUSAND RUPEES DOES NOT ATT RACT THE AFORESAID DISALLOWANCE IN CERTAIN CIRCUMSTANCES AS PRESCRIBED UNDER RULE 6DD OF THE INCOME-TAX RULES, 1962. SUCH EXCEPTIONS, INTER-ALIA, REFER TO PAYMENT MADE TO TH E PRODUCER FOR THE PURCHASE OF FISH OR FISH PRODUCTS UNDER S UB-CLAUSE (III) OF CLAUSE (E) OF RULE 6DD. [CLAUSE (F) OF RULE 6DD PRIOR TO COMING INTO EFFECT OF THE I.T. (EIGHTH AMENDMENT) R ULES, 2007 W.E.F. A.Y. 2008-09]. 3. THE FOLLOWING CLARIFICATIONS ARE, THEREFORE, BEI NG ISSUED FOR PROPER IMPLEMENTATION OF RULE 6DD OF THE INCOME -TAX RULES, 1962:- (I) THE EXPRESSION FISH OR FISH PRODUCTS USED IN RULER 6DD(E)(III) WOULD INCLUDE OTHER MARINE PRODUCTS SU CH AS SHRIMP, PRAWN, CUTTLEFISH, SQUID, CRAB, LOBSTER ETC .. (II) THE PRODUCERS OF FISH OR FISH PRODUCTS FO R THE PURPOSE OF RULE 6DD(E) OF I.T. RULES, 1962 WOULD INCLUDE, B ESIDES THE FISHERMEN, ANY HEADMAN OF FISHERMEN, WHO SORTS THE CATCH OF FISH BROUGHT BY FISHERMEN FROM THE SEA, AT THE SEA SHORE ITSELF AND THEN SELLS THE FISH OR FISH PRODUCTS TO TRADERS , EXPORTERS ETC. 7 ITA NO. 802/COCH/2013 4. IT IS FURTHER CLARIFIED THAT THE ABOVE EXCEPTION WILL NOT BE AVAILABLE ON THE PAYMENT FOR THE PURCHASE OF FISH O R FISH PRODUCTS FROM A PERSON WHO IS NOT PROVED TO BE A P RODUCER OF THESE GOODS AND IS ONLY A TRADER, BROKER OR ANY OTH ER MIDDLEMAN, BY WHATEVER NAME CALLED. 9. IT IS OBVIOUS FROM THE CIRCULAR THAT PRODUCER OF THE FISH OR FISH PRODUCTS WOULD INCLUDE, BESIDES THE FISHERMEN, ANY HEADMAN OF FISHERMEN, WHO SORTS THE CATCH OF FISH BROUGHT BY FISHERMEN FR OM THE SEA AT THE SEA SHORE ITSELF AND THEN SELLS THE FISH OR FISH PRODUC TS TO TRADERS, EXPORTERS ETC. THE CBDT HAS ALSO CLARIFIED THAT THE EXEMPTION WILL NOT BE AVAILABLE TO TRADER, BROKER OR ANY OTHER MIDDLEMEN BY WHATEVER N AME CALLED. THE ASSESSEE NOW CLAIMS THAT THE PAYMENT WAS MADE TO A HEADMAN / THARAKAN. A THARAKAN IS COMMONLY KNOWN AS A BROKER OR A MIDDLEMAN WHO FACILITATE FINALIZATION OF THE PRICE BETWEEN THE SE LLER AND PURCHASER. A THARAKAN ALSO KNOWN AS AGENT WHO WOULD ACT EITHER O N BEHALF OF SELLER OR PURCHASER AS THE CASE MAY BE. HOWEVER, HEADMAN OF FISHERMEN IS PART OF FISHERMEN WHO WILL SORT THE FISH CATCH AND SELL THE FISH ON BEHALF OF FISHERMEN. THEREFORE, IT IS NECESSARY TO FIND OUT THE EXACT ROLE PLAYED BY THE PERSON TO WHOM THE PAYMENT WAS MADE BY CASH. M ERELY BECAUSE THE ASSESSEE HAS PAID RS.1,66,59,325 BY CHEQUE TO THE V ERY SAME PERSON THAT CANNOT ALONE BE A REASON TO DISALLOW THE CLAIM OF T HE ASSESSEE. WHEN THE ASSESSEE CLAIMS THAT THE PAYMENT WAS MADE TO A HEAD MAN WHO SORTS THE 8 ITA NO. 802/COCH/2013 FISH CATCH, THE ASSESSING OFFICER SHALL FIND OUT TH E EXACT ROLE PLAYED BY THE PERSON WHO RECEIVED PAYMENT BY CASH. WHEN THE VERY SAME PERSON RECEIVED HUGE PAYMENT BY CHEQUE, IT MAY NOT BE DIFF ICULT FOR THE ASSESSING OFFICER TO SUMMON THEM AND EXAMINE THE ACTUAL ROLE PLAYED BY HIM. HAD THE ASSESSEE CLAIMED THAT THE FISH OR FISH PRODUCTS ARE PURCHASED FROM FISHERMAN OR PRODUCERS THE MATTER WOULD STAND ON DI FFERENT FOOTING. SINCE THE FISH WAS ADMITTEDLY PURCHASED FROM A PERSON OTH ER THAN FISHERMAN OR PRODUCERS THE EXACT ROLE OF THAT MIDDLEMAN HAS TO B E EXAMINED IN VIEW OF THE CIRCULAR ISSUED BY CBDT. 10. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIE S ARE SET ASIDE AND THE ISSUE IS REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL BRING ON RECORD THE EXACT ROLE PLAYED BY THE PERSON WHO RECEIVED THE PAYMENT IN CASH. THE ASSESSING OFFICE R SHALL RE-EXAMINE THE MATTER IN THE LIGHT OF THE CIRCULAR ISSUED BY CBDT AND THE JUDGMENT OF THE HIGH COURT IN INTERSEAS SEAFOOD EXPORTERS (SUPRA) A ND THEREAFTER DECIDE THE SAME IN ACCORDANCE WITH LAW AFTER GIVING SUFFIC IENT OPPORTUNITY TO THE ASSESSEE. 11. THE NEXT GROUND OF APPEAL IS WITH REGARD TO DIS ALLOWANCE OF RS.3,02,754 U/S 40(A)(IA) OF THE ACT TOWARDS SHIPPI NG CHARGES. 9 ITA NO. 802/COCH/2013 12. SHRI CBM WARRIER, THE LD.REPRESENTTIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS PAID RS.64,12,589 TOWARDS FRE IGHT CHARGES. ACCORDING TO THE LD.REPRESENTATIVE, THE ASSESSEE HA S PAID THE ENTIRE MOUNT WITHOUT DEDUCTING TAX. SINCE THE AMOUNT HAS ALREA DY BEEN PAID, ACCORDING TO THE LD.REPRESENTATIVE, THE PROVISIONS OF SECTION 40(A)(IA) IS NOT APPLICABLE. SIMILARLY, THE ASSESSEE HAS ALSO PAID RS.10,17,204 TOWARDS CLEARING AND FORWARDING CHARGES WITHOUT DEDUCTING T AX. SINCE THE ENTIRE AMOUNT WAS PAID TOWARDS SHIPPING / FREIGHT CHARGES AND CLEARING & FORWARDING CHARGES BEFORE THE END OF THE FINANCIAL YEAR, ACCORDING TO THE LD.REPRESENTATIVE, THE PROVISIONS OF SECTION 40(A)( IA) ARE NOT APPLICABLE. THE LD.REPRESENTATIVE SUBMITTED THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE ONLY IN RESPECT OF AMOUNTS REMAINING TO BE PAID AT THE END OF THE FINANCIAL YEAR. THE LD.REPRESENTATIVE RELIED U PON THE DECISION OF THE VISAKHAPATNAM SPECIAL BENCH OF THIS TRIBUNAL IN MER LYN SHIPPING & TRANSPORTS VS ADDL CIT (2012) 70 DTR 81 (VIZAG). THE LD.REPRESENTATIVE HAS ALSO PLACED RELIANCE ON THE JUDGMENT OF THE ALL AHABAD HIGH COURT IN CIT VS M/S VECTOR SHIPPING SERVICES (P) LTD I.T.A. NO.122 OF 2013. THE LD.REPRESENTATIVE SUBMITTED THAT THE JUDGMENT OF TH E ALLAHABAD HIGH COURT IN M/S VECTOR SHIPPING SERVICES (P) LTD (SUPRA) WAS CONFIRMED BY THE APEX COURT BY DISMISSING THE SPECIAL LEAVE PETITION FILE D BY THE DEPARTMENT. THE LD.REPRESENTATIVE HAS ALSO PLACED RELIANCE ON T HE DECISION OF THE CHENNAI BENCH OF THIS TRIBUNAL FOR THE PROPOSITION THAT WHEN TWO VIEWS ARE 10 ITA NO. 802/COCH/2013 POSSIBLE, ONE FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE HEARD THE LD.DR ALSO. 13. THE ONLY CONTENTION OF THE ASSESSEE IS THAT THE AMOUNT HAS ALREADY BEEN PAID AND THAT PROVISIONS OF SECTION 40(A)(IA) IS APPLICABLE ONLY IN RESPECT OF THE AMOUNT REMAINS TO BE PAID. NO DOUBT , IN THE CASE OF MERLYN SHIPPING & TRANSPORTS (SUPRA), THE SPECIAL BENCH OF THIS TRIBUNAL FOUND THAT THE AMOUNT REMAINS TO BE PAID AT THE YEAR END ALONE IS HIT BY PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND IN R ESPECT OF THE AMOUNT ALREADY PAID THE PROVISIONS OF SECTION 40(A)(IA) CA NNOT BE APPLIED. 14. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMEN T OF THE ALLAHABAD HIGH COURT IN CIT VS M/S VECTOR SHIPPING SERVICES ( P) LTD (SUPRA), COPY OF WHICH IS FILED BY THE ASSESSEE. THE ALLAHABAD HIGH COURT, AFTER REPRODUCING THE RELEVANT PARAGRAPH FROM THE ORDER O F CIT(A) AND REFERRING TO THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUN AL IN MERILYIN SHIPPING & TRANSPORTS (SUPRA) FOUND THAT THE TRIBUNAL HAS NOT COMMITTED AN ERROR. IT IS OBVIOUS THAT THERE IS NO DISCUSSION ABOUT THE CORRE CTNESS OR OTHERWISE OF THE DECISION RENDERED BY THE SPECIAL BENCH OF THIS TRIBUNAL IN MERILYN SHIPPING & TRANSPORTS (SUPRA). HOWEVER, WE FIND TH AT THE GUJARAT HIGH COURT IN THE CASE OF CIT VS SIKANDARKHAN N TUNVAR I TA NOS 905 OF 2012, 709 & 710 OF 2012, 333 OF 2013, 832 OF 2012, 857 OF 2012, 894 OF 2012, 11 ITA NO. 802/COCH/2013 928 OF 2012, 12 OF 2013, 51 OF 2013, 58 OF 2013 AND 218 OF 2013 JUDGMENT DATED 02-05-2013 CONSIDERED THE DECISION OF THE SPE CIAL BENCH OF THIS TRIBUNAL IN MERILYN SHIPPING & TRANSPORTS (SUPRA) A ND SPECIFICALLY DISAGREED WITH THE PRINCIPLES LAID DOWN BY THE SPEC IAL OF THIS TRIBUNAL IN MERILYN SHIPPING & TRANSPORTS (SUPRA). THE CALCUTT A HIGH COURT ALSO IN THE CASE OF CRESCENT EXPORTS SYNDICATE & ANOTHER IN ITAT 20 OF 2013 AND GA 190 OF 2013 JUDGMENT DATED 03-04-2013 CONSIDERED ELABORATELY THE JUDGMENT OF THE SPECIAL BENCH OF THIS TRIBUNAL IN M ERILYN SHIPPING & TRANSPORTS (SUPRA) AND FOUND THAT THE DECISION REND ERED BY THE SPECIAL BENCH OF THIS TRIBUNAL IS NOT THE CORRECT LAW. IT IS WELL SETTLED PRINCIPLES OF LAW THAT WHEN DIFFERENT HIGH COURTS EXPRESSED DIFFE RENT OPINIONS ON A POINT OF LAW, THEN, NORMALLY, THE BENEFIT OF DOUBT UNDER THE TAXATION LAW WOULD GO TO THE ASSESSEE. IT IS ALSO EQUALLY SETTLED PRINCI PLES OF LAW THAT THE JUDGMENT WHICH DISCUSSES THE POINT IN ISSUE ELABORA TELY AND GIVES AN ELABORATE REASONING HAS TO BE PREFERRED WHEN COMPAR ED TO THE JUDGMENT WHICH HAS NO REASONING AND DISCUSSION. ADMITTEDLY, THE CALCUTTA HIGH COURT AND GUJARAT HIGH COURT HAVE DISCUSSED THE ISS UE ELABORATELY AND ELABORATE REASONS HAVE ALSO BEEN RECORDED AS TO WHY THE SPECIAL BENCH IS NOT CORRECT. THEREFORE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE JUDGMENTS OF THE CALCUTTA HIGH COURT IN CRESCENT EX PORTS SYNDICATE & ANOTHER (SUPRA) AND GUJARAT HIGH COURT IN SIKANDARK HAN N TUNVAR (SUPRA) HAVE TO BE PREFERRED WHEN COMPARED TO THE ALLAHABAD HIGH COURT IN M/S 12 ITA NO. 802/COCH/2013 VECTOR SHIPPING SERVICES (P) LTD (SUPRA). MOREOVER , THE MUMBAI BENCH OF THIS TRIBUNAL IN ACIT VS RISHTI STOCK & SHARES P LT D IN ITA NO.112/MUM/2012. 15. FOR THE PURPOSE OF CONVENIENCE WE REPRODUCING B ELOW THE OBSERVATIONS MADE BY THE CALCUTTA HIGH COURT IN CRE SCENT EXPORTS SYNDICATE & ANOTHER (SUPRA) AND GUJARAT HIGH COURT IN SIKANDARKHAN N TUNVAR (SUPRA): CALCUTTA HIGH COURT IN CRESCENT EXPORTS SYNDICATE & ANOTHER (SUPRA) BEFORE DEALING WITH THE SUBMISSIONS OF THE LEARNE D COUNSEL APPEARING FOR THE ASSESSEES IN BOTH THE APP EALS WE HAVE TO EXAMINE THE CORRECTNESS OF THE MAJORITY VIE WS IN THE CASE OF MERILYN SHIPPING. WE ALREADY HAVE QUOTED EXTENSIVELY BOTH THE MAJORI TY AND THE MINORITY VIEWS EXPRESSED IN THE AFORESAID C ASE. THE MAIN THRUST OF THE MAJORITY VIEW IS BASED ON THE FA CT THAT THE LEGISLATURE HAS REPLACED THE EXPRESSION AMOUNTS CR EDITED OR PAID WITH THE EXPRESSION PAYABLE IN THE FINAL EN ACTMENT. COMPARISON BETWEEN THE PRE-AMENDMENT AND POST AMENDMENT LAW IS PERMISSIBLE FOR THE PURPOSE OF ASC ERTAINING THE MISCHIEF SOUGHT TO BE REMEDIED OR THE OBJECT SO UGHT TO BE ACHIEVED BY AN AMENDMENT. THIS IS PRECISELY WHAT W AS DONE BY THE APEX COURT IN THE CASE OF CIT VS. KELVINATOR REPORTED IN 2010(2) SCC 723. BUT THE SAME COMPARISON BETWEEN T HE 13 ITA NO. 802/COCH/2013 DRAFT AND THE ENACTED LAW IS NOT PERMISSIBLE. NOR CAN THE DRAFT OR THE BILL BE USED FOR THE PURPOSE OF REGULATING T HE MEANING AND PURPORT OF THE ENACTED LAW. IT IS THE FINALLY ENACTED LAW WHICH IS THE WILL OF THE LEGISLATURE. THE LEARNED TRIBUNAL FELL INTO AN ERROR IN NOT REA LIZING THIS ASPECT OF THE MATTER. THE LEARNED TRIBUNAL HELD THAT WHERE LANGUAGE IS CLEAR THE INTENTION OF THE LEGISLATURE IS TO BE GATHERED FROM THE LANGUAGE USED. HAVING HELD SO, IT WAS NOT OPEN TO SEEK TO INTERPRET THE SECTION ON THE BASIS OF ANY COMPARISO N BETWEEN THE DRAFT AND THE SECTION ACTUALLY ENACTED NOR WAS IT OPEN TO SPECULATE AS TO THE EFFECT OF THE SO-CALLED REPRESE NTATIONS MADE BY THE PROFESSIONAL BODIES. THE LEARNED TRIBUNAL HELD THAT SECTION 40(A)(IA) OF THE ACT CREATES A LEGAL FICTION BY VIRTUE OF WHICH EVEN THE GENUINE AND ADMISSIBLE EXPENSES CLAIMED BY AN ASSESSEE UNDE R THE HEAD INCOME FROM BUSINESS AND PROFESSION: IF THE ASSESSEE DOES NOT DEDUCT TDS ON SUCH EXPENSES ARE DISALLOWED . HAVING HELD SO WAS IT OPEN TO THE TRIBUNAL TO SEEK TO JUSTIFY THAT THIS FICTION CANNOT BE EXTENDED ANY F URTHER AND, THEREFORE, CANNOT BE INVOKED BY ASSESSING OFFICER T O DISALLOW THE GENUINE AND REASONABLE EXPENDITURE ON THE AMOUN TS OF EXPENDITURE ALREADY PAID? DOES THIS NOT AMOUNT TO DELIBERATELY READING SOMETHING IN THE LAW WHICH IS NOT THERE? WE, AS SUCH, HAVE NO DOUBT IN OUR MIND THAT THE LEARNED TRIBUNAL REALIZED THE MEANING AND PURPORT O F SECTION 40(A)(IA) CORRECTLY WHEN IT HELD THAT IN CASE OF OM ISSION TO DEDUCT TAX EVEN THE GENUINE AND ADMISSIBLE EXPENSES ARE TO BE DISALLOWED. BUT THEY SOUGHT TO REMOVE THE RIGOU R OF THE LAW 14 ITA NO. 802/COCH/2013 BY HOLDING THAT THE DISALLOWANCE SHALL BE RESTRICTE D TO THE MONEY WHICH IS YET TO BE PAID. WHAT THE TRIBUNAL B Y MAJORITY DID WAS TO SUPPLY THE CASUS OMISSUS WHICH WAS NOT PERMISSIBLE AND COULD ONLY HAVE BEEN DONE BY THE SU PREME COURT IN AN APPROPRIATE CASE. REFERENCE IN THIS RE GARD MAY BE MADE TO THE JUDGMENT IN THE CASE OF BHUWALKA STEEL INDUSTRIES VS. BOMBAY IRON & STEEL LABOUR BOARD REPORTED IN 20 10(2) SCC 273. UNPROTECTED WORKER WAS FINALLY DEFINED IN SECTIO N 2(11) OF THE MATHADI ACT AS FOLLOWS:- UNPROTECTED WORKER MEANS A MANUAL WORKER WHO IS ENGAGED OR TO BE ENGAGED IN ANY SCHEDULED EMPLOYMEN T. THE CONTENTION RAISED WITH REFERENCE TO WHAT WAS T HERE IN THE BILL WAS REJECTED BY THE SUPREME COURT BY HO LDING AS FOLLOWS: IT MUST, AT THIS JUNCTURE, BE NOTED THAT IN SPITE OF SECTION 2(11), WHICH INCLUDED THE WORDS BUT FOR TH E PROVISIONS OF THIS ACT IS NOT ADEQUATELY PROTECTED BY LEGISLAT ION FOR WELFARE AND BENEFITS OF THE LABOUR FORCE IN THE STATE, THE SE PRECISE WORDS WERE REMOVED BY THE LEGISLATURE AND THE DEFIN ITION WAS MADE LIMITED AS IT HAS BEEN FINALLY LEGISLATED UPON . IT IS TO BE NOTED THAT WHEN THE BILL CAME TO BE PASSED AND RECE IVED THE ASSENT OF THE VICE-PRESIDENT ON 05-06-1969 AND WAS FIRST PUBLISHED IN THE MAHARASHTRA GOVERNMENT GAZETTE EXTRAORDINARY, PART IV ON 13-06-1969, THE AFOREMENT IONED WORDS WERE OMITTED. THEREFORE, T HIS WOULD BE A CL EAR POINTER TO THE LEGISLATIVE INTENT THAT THE LEGISLATURE BEIN G CONSCIOUS OF THE FACT AND BEING ARMED WITH ALL THE COMMITTEE REP ORTS AND ALSO BEING ARMED WITH THE FACTUAL DATA, DELIBERATEL Y AVOIDED 15 ITA NO. 802/COCH/2013 THOSE WORDS. WHAT THE APPELLANTS ARE ASKING WAS TO READ IN THAT DEFINITION, THESE PRECISE WORDS, WHICH WERE CO NSCIOUSLY AND DELIBERATELY OMITTED FROM THE DEFINITION. THAT WOULD AMOUNT TO SUPPLYING THE CASUS OMISSUS AND WE DO NOT THINK THAT IT IS POSSIBLE, PARTICULARLY, IN THIS CASE. T HE LAW OF SUPPLYING THE CASUS OMISSUS BY THE COURTS IS EXTREM ELY CLEAR AND SETTLED THAT THOUGH THIS COURT MAY SUPPLY THE C ASUS OMISSUS, IT WOULD BE IN THE RAREST OF THE RATE CASE AND THUS SUPPLYING OF THIS CASUS OMISSUS WOULD BE EXTREMELY NECESSARY DUE TO THE INADVERTENT OMISSION ON THE PA RT OF THE LEGISLATURE. BUT, THAT IS CERTAINLY NOT THE CASE H ERE. WE SHALL NOW ENDEAVOUR TO SHOW THAT NO OTHER INTERPRETATION IS POSSIBLE. THE KEY WORDS USED IN SECTION 40(A)(IA), ACCORDING TO US, ARE ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B. IF THE QUESTION IS WHICH EXPENSES ARE SO UGHT TO BE DISALLOWED? THE ANSWER IS BOUND TO BE THOSE EXPEN SES ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVI I-B. ONCE THIS IS REALIZED NOTHING TURNS ON THE BASIS OF THE FACT THAT THE LEGISLATURE USED THE WORD PAYABLE AND NOT PAID O R CREDITED. UNLESS ANY AMOUNT IS PAYABLE, IT CAN NEITHER BE PAI D NOR CREDITED. IF N AMOUNT HAS NEITHER BEEN PAID NOR CR EDITED, THERE CAN BE NO OCCASION FOR CLAIMING ANY DEDUCTION. THE LANGUAGE USED IN THE DRAFT WAS UNCLEAR AND SUSCEPTIBLE TO GIVING MORE THAN ONE MEANING. BY LO OKING AT THE DRAFT IT COULD BE SAID THAT THE LEGISLATURE WAN TED TO TREAT THE PAYMENTS MADE OR CREDITED IN FAVOUR OF A CONTRACTOR OF SUB- CONTRACTOR DIFFERENTLY THAN THE PAYMENTS ON ACCOUNT OF INTEREST, COMMISSION OR BROKERAGE, FEES FOR PROFESSIONAL SERV ICES OR 16 ITA NO. 802/COCH/2013 FEES FOR TECHNICAL SERVICES BECAUSE THE WORDS MOUN TS CREDITED OR PAID WERE USED ONLY IN RELATION TO A C ONTRACTOR OF SUB-CONTRACTOR. THIS DIFFERENTIAL TREATMENT WAS NO T INTENDED. THEREFORE, THE LEGISLATURE PROVIDED THAT THE AMOUNT S, ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER XVII-B PAYABLE O N ACCOUNT OF INTEREST, COMMISSION OR BROKERAGE, RENT, ROYALTY , FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICE S OR TO A CONTRACTOR OF SUB-CONTRACTOR SHALL NOT BE DEDUCTED IN COM PUTTING THE INCOME OF AN ASSESSEE IN CASE HE HAS NO T DEDUCTED, OR AFTER DEDUCTION HAS NOT PAID WITHIN TH E SPECIFIED TIME. THE LANGUAGE USED BY THE LEGISLATURE IN THE FINALLY ENACTED LAW IS CLEAR AND UNAMBIGUOUS WHEREAS THE LA NGUAGE USED IN THE BILL WAS AMBIGUOUS. A FEW WORDS ARE NOW NECESSARY TO DEAL WITH THE SUBMISSION OF MR. BAGCHI AND MS. ROYCHOWDHURI. THE RE CAN BE NO DENIAL THAT THE PROVISION IN QUESTION IS HARS H. BUT THAT IS NO GROUND TO READ THE SAME IN A MANNER WHICH WAS NO T INTENDED BY THE LEGISLATURE. THIS IS OUR ANSWER TO THE SUBMISSION OF MR. BAGCHI. THE SUBMISSION OF MR. ROYCHOWDHURI THAT THE SECOND PROVISO SOUGHT TO BECO ME EFFECTIVE FROM 1 ST APRIL, 2013 SHOULD BE HELD TO HAVE ALREADY BECOME OPERATIVE PRIOR TO THE APPOINTED DATE CANNOT ALSO BE ACCEDED TO FOR THE SAME REASON INDICATED ABOVE. TH E LAW WAS DELIBERATELY MADE HARSH TO SECURE COMPLIANCE OF THE PROVISIONS REQUIRING DEDUCTIONS OF TAX AT SOURCE. IT IS NOT THE CASE OF AN INADVERTENT ERROR. FOR THE REASONS DISCUSSED ABOVE, WE ARE OF THE OPI NION THAT THE MAJORITY VIEWS EXPRESSED IN THE CASE OF MERILYN SHIPPING & 17 ITA NO. 802/COCH/2013 TRANSPORTS ARE NOT ACCEPTABLE. THE SUBMISSIONS ADV ANCED BY LEARNED ADVOCATES HAVE ALREADY BEEN DEALT WITH AND REJECTED. GUJARAT HIGH COURT IN SIKANDARKHAN N TUNVAR(SUPRA) 23. DESPITE THIS NARROW INTERPRETATION OF SECTION 40(A)(IA), THE QUESTION STILL SURVIVES IF THE TRIBUNAL IN CASE OF M/S MERILYN SHIPPING & TRANSPORS VS. ACIT (SUPRA) WAS ACCURATE IN ITS OPINION. IN THIS CONTEXT, WE WOULD LIKE TO EXAMINE TWO ASPECTS. FIRSTLY, WHAT WOULD BE THE CO RRECT INTERPRETATION OF THE SAID PROVISION. SECONDLY, WH ETHER OUR SUCH UNDERSTANDING OF THE LANGUAGE USED BY THE LEGI SLATURE SHOULD WAVER ON THE PREMISE THAT AS PROPOUNDED BY T HE TRIBUNAL, THIS WAS A CASE OF CONSCIOUS OMISSION ON THE PART OF THE PARLIAMENT. BOTH THESE ASPECTS WE WOULD ADDRES S ONE AFTER ANOTHER. IF ONE LOOKS CLOSELY TO THE PROVISI ON, IN QUESTION, ADVERSE CONSEQUENCES OF NOT BEING ABLE TO CLAIM DED UCTION ON CERTAIN PAYMENTS IRRESPECTIVE OF THE PROVISIONS CON TAINED IN SECTIONS 30 TO 38 OF THE ACT WOULD FLOW IF THE FOLL OWING REQUIREMENTS ARE SATISFIED:- (A) THERE IS INTEREST, COMMISSION OR BROKERAGE, REN T, ROYALTY, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICA L SERVICES PAYABLE TO RESIDENT OR AMOUNTS PAYABLE TO A CONTRAC TOR OR SUB-CONTRACTOR BEING RESIDENT FOR CARRYING OUT ANY WORK. (B) THESE AMOUNTS ARE SUCH ON WHICH TAX IS DEDUCTIB LE AT SOURCE UNDER XVIII-B. (C) SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTI ON HAS NOT BEEN PAID ON OR BEFORE DUE DATE SPECIFIED IN SUB-SE CTION (1) OF SECTION 39. 18 ITA NO. 802/COCH/2013 FOR THE PURPOSE OF CURRENT DISCUSSION REFERENCE TO THE PROVISO IS NOT NECESSARY. 24. WHAT THIS SUB-SECTION, THEREFORE, REQUIRES IS T HAT THERE SHOULD BE AN AMOUNT PAYABLE IN THE NATURE DESCRIBED ABOVE, WHICH IS SUCH ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B BUT SUCH TAX HAS NOT BEEN DEDUCTED O R IF DEDUCTED NOT PAID BEFORE THE DUE DATE. THIS PROVIS ION NOWHERE REQUIRES THAT THE AMOUNT WHICH IS PAYABLE M UST REMAIN SO PAYABLE THROUGHOUT DURING THE YEAR. TO R EITERATE THE PROVISION HAS CERTAIN STRICT AND STRINGENT REQU IREMENTS BEFORE THE UNPLEASANT CONSEQUENCES ENVISAGED THEREI N CAN BE APPLIED. WE ARE PREPARED TO AND WE ARE DUTY BOU ND TO INTERPRET SUCH REQUIREMENTS STRICTLY. SUCH REQUIRE MENTS, HOWEVER, CANNOT BE ENLARGED BY ANY ADDITION OR SUBT RACTION OF WORDS NOT USED BY THE LEGISLATURE. THE TERM USED I S INTEREST, COMMISSION, BROKERAGE ETC. IS PAYABLE TO A RESIDENT OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR F OR CARRYING OUT ANY WORK. THE LANGUAGE USED IS NOT THAT SUCH A MOUNT MUST CONTINUE TO REMAIN PAYABLE TILL THE END OF THE ACCOUNTING YEAR. ANY SUCH INTERPRETATION WOULD REQUIRE READIN G WORDS WHICH THE LEGISLATURE HAS NOT USED. NO SUCH INTERP RETATION WOULD EVEN OTHERWISE BE JUSTIFIED BECAUSE IN OUR OP INION, THE LEGISLATURE COULD NOT HAVE INTENDED TO BRING ABOUT ANY SUCH DISTINCTION NOR THE LANGUAGE USED IN THE SECTION BR INGS ABOUT ANY SUCH MEANING. IF THE INTERPRETATION S ADVANCED BY THE ASSESSEES IS ACCEPTED, IT WOULD LEAD TO A SITUATION WHERE THE ASSESSEE THOUGH WAS REQUIRED TO DEDUCT THE TAX AT S OURCE BUT NO SUCH DEDUCTION WAS MADE OR MORE FLAGRANTLY DEDUC TION THOUGH MADE IS NOT PAID TO THE GOVERNMENT, WOULD ES CAPE THE 19 ITA NO. 802/COCH/2013 CONSEQUENCE ONLY BECAUSE THE AMOUNT WAS ALREADY PAI D OVER BEFORE THE END OF THE YEAR IN CONTRAST TO ANOTHER A SSESSEE WHO WOULD OTHERWISE BE IN SIMILAR SITUATION BUT IN WHOSE CASE THE AMOUNT REMAINED PAYABLE TILL THE END OF THE YEA R. WE SIMPLY DO NOT SEE ANY LOGIC WHY THE LEGISLATURE WOU LD HAVE DESIRED TO BRING ABOUT SUCH IRRECONCILABLE AND DIVE RSE CONSEQUENCES. WE HASTEN TO ADD THAT THIS IS NOT TH E PRIME BASIS ON WHICH WE HAVE ADOPTED THE INTERPRETATION W HICH WE HAVE GIVEN. IF THE LANGUAGE USED BY THE PARLIAMENT CONVEYED SUCH A MEANING, WE WOULD NOT HAVE HESITATED IN ADOP TING SUCH AN INTERPRETATION. WE ONLY HIGHLIGHT THT WE W OULD NOT READILY ACCEPT THAT THE LEGISLATURE DESIRED TO BRIN G ABOUT AN INCONGRUOUS AND SEEMINGLY IRRECONCILABLE CONSEQUENC ES. THE DECISION OF HE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX, GUJARAT VS. ASHOKBHAI CHIMANBHAI (SUPRA), WOULD NO6T ALTER THIS SITUATION. THE SAID DECISION , OF COURSE, RECOGNIZES THE CONCEPT OF ASCERTAINING THE PROFIT A ND LOSS FROM THE BUSINESS OR PROFESSION WITH REFERENCE TO A CERT AIN PERIOD I.E. THE ACCOUNTING YEAR. IN THIS CONTEXT, LAST DA TE OF SUCH ACCOUNTING PERIOD WOULD ASSUME CONSIDERABLE SIGNIFI CANCE. HOWEVER, THIS DECISION NOWHERE INDICATES THAT THE E VENTS WHICH TAKE PLACE DURING THE ACCOUNTING PERIOD SHOUL D BE IGNORED AND THE ASCERTAINMENT OF FULFILLING A CERTA IN CONDITION PROVIDED UNDER THE STATUTE MUST BE JUDGED WITH REFE RENCE TO LAST DATE OF THE ACCOUNTING PERIOD. PARTICULARLY, IN THE CONTEXT OF REQUIREMENTS F SECTION 40(A)(IA) OF THE ACT, WE SEE NO WARRANT IN THE SAID DECISION OF THE SUPREME COURT T O APPLY THE TEST OF PAYABILITY ONLY AS ON 31 ST MARCH OF THE YEAR UNDER CONSIDERATION. MERELY BECAUSE, ACCOUNTS ARE CLOSED ON THAT 20 ITA NO. 802/COCH/2013 DATE AND THE COMPUTATION OF PROFIT AND LOSS IS TO B E JUDGED WITH REFERENCE TO SUCH DATE, DOES NOT MEAN THAT WHE THER AN AMOUNT IS PAYABLE OR NOT MUST BE ASCERTAINED ON THE STRENGTH OF THE POSITION EMERGING ON 31T MARCH. 25. THIS BRINGS US TO THE SECOND ASPECT OF THIS DIS CUSSION, NAMELY, WHETHER THIS IS A CASE OF CONSCIOUS OMISSIO N AND THEREFORE, THE LEGISLATURE MUST BE SEEN TO HAVE DEL IBERATELY BROUGHT ABOUT A CERTAIN SITUATION WHICH DOES NOT RE QUIRE ANY FURTHER INTERPRETATION. THIS IS THE FUNDAMENTAL AR GUMENT OF THE TRIBUNAL IN THE CASE OF M/S MERILYN SHIPPING & TRANSPORTS VS. ACIT (SUPRA) TO ADOPT A PARTICULAR VIEW. 26. WHILE INTERPRETING A STATUTORY PROVISION THE CO URTS HAVE OFTEN APPLIED HYDENS RULE OR THE MISCHIEF RULE AND ASCERTAINED WHAT WAS THE POSITION BEFORE THE AMENDMENT, WHAT TH E AMENDMENT SOUGHT TO REMEDY AND WHAT WAS THE EFFECT OF THE CHANGES. 27 TO 36.. 37. IN OUR OPINION, THE TRIBUNAL COMMITTED AN ERROR IN APPLYING THE PRINCIPLE OF CONSCIOUS OMISSION IN THE PRESENT CASE. FIRSTLY, AS ALREADY OBSERVED, WE HAVE SERIOU S DOUBT WHETHER SUCH PRINCIPLE CAN BE APPLIED BY COMPARING THE DRAFT PRESENTED IN PARLIAMENT AND ULTIMATE LEGISLATION WH ICH MAY BE PASSED. SECONDLY, THE STATUTORY PROVISIONS IS AMPL Y CLEAR. 38. IN THE RESULT, WE ARE OF THE OPINION THAT SECTI ON 40(A)(IA) WOULD COVER NOT ONLY TO THE AMOUNTS WHICH ARE PAYAB LE AS ON 31 ST MARCH OF A PARTICULAR YEAR BUT ALSO WHICH ARE PAYA BLE AT ANY TIME DURING THE YEAR. OF COURSE, AS LONG AS TH E OTHER REQUIREMENT OF THE SAID PROVISION EXIST. IN THAT C ONTEXT, IN OUR 21 ITA NO. 802/COCH/2013 OPINION THE DECISION OF THE SPECIAL BENCH OF THE TR IBUNAL IN THE CASE OF M/S MERILYN SHIPPING & TRANSPORTS VS ACIT (SUPRA), DOES NOT LAY DOWN CORRECT LAW. 16. BY FOLLOWING THE JUDGMENTS OF THE CALCUTTA HIGH COURT IN CRESCENT EXPORT SYNDICATE (SUPRA) AND THE GUJARAT HIGH COURT IN SIKANDARKHAN N TUNVAR (SUPRA), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE O F M/S MERILYN SHIPPING & TRANSPORTS (SUPRA) AND THE JUDGMENT OF THE ALLAHABA D HIGH COURT IN VECTOR SHIPPING SERVICES (P) LTD (SUPRA) ARE NOT APPLICABL E TO THE FACTS OF THE CASE UNDER CONSIDERATION WHEREAS THE JUDGMENTS OF T HE CALCUTTA HIGH COURT IN CRESCENT EXPORT SYNDICATE (SUPRA) AND THE GUJARAT HIGH COURT IN SIKANDARKHAN N TUNVAR (SUPRA) ARE SQUARELY APPLICAB LE TO THE FACTS OF THE CASE. THE DISMISSAL OF SLP BY APEX COURT IS NOT A DECLARATION OF LAW UNDER ARTICLE 141 OF THE CONSTITUTION OF INDIA. TH EREFORE, MERE DISMISSAL OF SLP BY APEX COURT DOES NOT MEAN THAT THE APEX COURT DECLARED ANY LAW ON THE SUBJECT. MOREOVER, THE MUMBAI BENCH OF THE T RIBUNAL IN ACIT VS RISHTI STOCK & SHARES P LTD IN ITA NO.112/MUM/2012 HELD THE JUDGMENT OF THE ALLAHABAD HIGH COURT IN VECTOR SHIPPING SERVICE S (P) LTD (SUPRA) IS OBITER DICTA . THEREFORE, THE DECISION OF THE CHENNAI BENCH OF THIS TRIBUNAL IS ALSO NOT OF ANY ASSISTANCE TO THE ASSESSEE. RE SPECTFULLY FOLLOWING THE JUDGMENTS OF THE CALCUTTA HIGH COURT IN CRESCENT E XPORT SYNDICATE (SUPRA) AND THE GUJARAT HIGH COURT IN SIKANDARKHAN N TUNVAR (SUPRA), WE 22 ITA NO. 802/COCH/2013 DO NOT SEE ANY INFIRMITY IN THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE CONFIRMED. 17. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24 TH SEPTEMBER, 2014. SD/- SD/- (CHANDRA POOJARI) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 24 TH SEPTEMBER, 2014 PK/- COPY TO: 1. M/S ORCHID MARINE, ANWAR PALACE, CHANDIROOR, CHE RTHALA, ALAPPUZHA 2. THE ITO, WD.3, ALAPPUZHA 3. THE COMMISSIONER OF INCOME-TAX, KOTTAYAM 4. THE COMMISSIONER OF INCOME-TAX(A)-IV, KOCHI 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH