The DCITAnand Circle, Anand V. Prayas Engineering Limited, Anand

ITA 923/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 1075 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 12-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Question of law; Difference of opinion
• Section: 194C; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.923/AHD/2013 ( / ASSESSMENT YEAR : 2009-10) DEPUTY COMMISSIONER OF INCOME-TAX ANAND CIRCLE ANAND / VS. PRAYAS ENGINEERING LTD. ANAND SOJITRA ROAD VV NAGAR TAL. & DIST. ANAND-388 120 $ ./ ./ PAN/GIR NO. : AABCP 5134 E ( $& / APPELLANT ) .. ( '($& / RESPONDENT ) $&) / APPELLANT BY : SHRI SANJAY KUMAR, SR.DR '($&*) / RESPONDENT BY : SHRI M.K. PATEL, AR +* / DATE OF HEARING 12/07/2016 ,-./* / DATE OF PRONOUNCEMENT 18/07/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, BARODA, DAT ED 24/01/2013 FOR THE ASSESSMENT YEAR (AY) 2009-10. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 2 - 2.1. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING AND SUPPLYING BELT CONVEYER SPARES. IT ELECTRONICALLY FILED ITS RETURN OF INCOME FOR AY 2009-10 ON 29/09/2009 D ECLARING TOTAL INCOME OF RS.12,95,25,612/-. THE CASE WAS SELECTE D FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') VIDE OR DER DATED 04/11/2011 AND THE TOTAL INCOME WAS DETERMINED AT RS.14,65,88, 840/-. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER (AO), ASSESSEE C ARRIED THE MATTER BEFORE THE LD.CIT(A), WHO VIDE ORDER DATED 24/01/20 13 (IN APPEAL NO.CAB/IV-A-293/2011-12) DELETED THE ADDITION AND D ECIDED THE ISSUE IN FAVOUR OF ASSESSEE. AGGRIEVED BY THE ORDER OF T HE LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWANCE OF 1,39,79,719/- U/S 40(A)(IA) OF THE ACT, IN RESPECT OF PAYMENT MADE TO AKAAISH MECHATRO NICS LTD., COMPLETELY OVERLOOKING THE FACT THAT AS PER PROVISIONS OF SECT ION 40(A)(IA), THE TAX IS TO BE DEDUCTED AT SOURCE UNDER CHAPTER XV11B WHICH PRESCRIBES DIFFERENT RATE UNDER DIFFERENT SECTIONS AND IN THE INSTANT CA SE, THE ASSESSEE DEDUCTED TAX AT A LOWER RATE THAN PRESCRIBED U/S 194J OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWANCE OF 30,83,507/- MADE U/S 40(A)(IA) OF THE ACT, IN RESPECT OF PAYMENT MADE FOR REIMBURSEME NT OF EXPENSES TO CLEARING HOUSE AGENTS WITHOUT APPRECIATING THE FACT THAT TDS OF 69,873/- ON THE ABOVE PAYMENT WAS NOT PAID WITHIN THE PRESCR IBED LIMIT AS SPECIFIED IN SUB-SECTION (1) OF SECTION 139 OF THE ACT. ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 3 - 3. FIRST GROUND IS WITH RESPECT TO DELETION OF AD DITION MADE U/S.40(A)(IA) OF THE ACT. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICED THAT THE ASSESSEE HAD MADE PAYMENT TO M/S.AKAAISH MECHATRONI CS LTD. (AML) AND HAD DEDUCTED TAX U/S.194-C OF THE ACT. AO WAS OF THE VIEW THAT THE SERVICES RENDERED BY AML TO ASSESSEE WAS IN THE NAT URE OF TECHNICAL SERVICES AND THEREFORE ASSESSEE SHOULD HAVE DEDUCT ED TAX U/S.194-J OF THE ACT. HE ALSO NOTICED THAT ANOTHER GROUP COMPAN Y, M/S.ELCON ENGINEERING CO.LTD., FOR SIMILAR SERVICES HAD DEDUC TED TDS U/S.194-J OF THE ACT. HE THEREFORE CONCLUDED THAT SINCE ASSESSE E HAD FAILED TO DEDUCT TDS U/S.194-J OF THE ACT THE PORTION OF EXPENDITURE THAT WAS PAID WITHOUT DEDUCTION OF TAX U/S.194-J WAS LIABLE FOR DISALLOWA NCE U/S.40(A)(IA) OF THE ACT. HE ACCORDINGLY, DISALLOWED RS.1,39,79,719/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A) WHO DELETED THE ADDITION BY HOLDING AS UNDER:- 4.5 WITH REGARD TO THIS FIRST GROUND OF APPEAL O F THE APPELLANT, I HAVE CONSIDERED THE REASONS AS MENTIONED BY THE AO IN TH E ASSESSMENT ORDER FOR MAKING THE DISALLOWANCE OF ABOVE EXPENDITURE OF 1,39,79,719/- AS WELL AS THE ABOVE SUBMISSION OF THE APPELLANT. IN T HIS REGARD, IT IS MENTIONED THAT SIMILAR ISSUE HAS ALREADY BEEN DECID ED BY THE LD. CIT(A)-IV, BARODA (I.E. MY PREDECESSOR) IN FAVOUR O F THE APPELLANT FOR AY 2007-08 IN ITS OWN CASE. 4.6 APPELLANT HAD DEDUCTED TAX AT SOURCE,, ALTHO UGH U/S 194C FROM THE PAYMENTS TO AKAAISH MECHATRONICS LIMITED (AML). SEC TION 40(A)(IA) IS ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 4 - APPLICABLE, WHERE TAX THOUGH DEDUCTIBLE IS NOT DEDU CTED OR AFTER DEDUCTION NOT PAID TO THE CREDIT OF GOVERNMENT. EVE N THOUGH, THERE IS DIFFERENCE OF OPINION BETWEEN THE A.O. AND THE APPE LLANT REGARDING CORRECT SECTION UNDER WHICH TAX IS REQUIRED TO BE D EDUCTED AT SOURCE, SECTION 40(A)(IA) WOULD NOT GET INVOKED IN SUCH A S ITUATION. EXPLANATORY NOTES TO FINANCE ACT (NO.2) OF 2004, WHICH INSERTED SECTION 40(A)(IA) READ AS UNDER:- 'FURTHER, WITH A VIEW TO AUGMENT COMPLIANCE OF TDS PROVISIONS IN THE CASE OF RESIDENTS AND CURB BOGUS PAYMENTS TO THEM I T HAS BEEN PROVIDED THAT NO DEDUCTION WILL BE ALLOWED IN THE C OMPUTATION OF INCOME WHERE TAX IS NOT DEDUCTED FROM PAYMENTS OF I NTEREST, COMMISSION OR BROKERAGE, FEES FOR PROFESSIONAL SERV ICES OR FEES FOR TECHNICAL SERVICES AND PAYMENTS TO A CONTRACTOR OR SUB-CONTRACTOR FOR CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR F OR CARRYING OUT ANY WORK), ON WHICH TAX IS DEDUCTIBLE AT SOURCE UNDER C HAPTER XVII-B AND SUCH TAX HAS NOT BEEN DEDUCTED OR, AFTER DEDUCTION, HAS NOT BEEN PAID DURING THE PREVIOUS YEAR, OR IN THE SUBSEQUENT YEAR BEFORE THE EXPIRY OF THE TIME PRESCRIBED UNDER SUB-SECTION (1) OF SEC TION 200.' 4.7. AS PER THE EXPLANATORY NOTES, SECTION 40(A)(IA ) WAS AIMED TO CURB BOGUS PAYMENTS, BY BRINGING THEM IN TAX NET. SINCE APPELLANT DEDUCTED TAX AT SOURCE U/S.!94C FROM PAYMENTS TO AKAAISH MEC HATRONICS LTD. AND PAID IT TO THE CREDIT OF GOVERNMENT, SUCH PAYMENTS WERE BROUGHT INTO TAX NET AND SECTION 40(A)(IA) WOULD NOT GET TRIGGER ED. ACTION, IF ANY FOR SHORT DEDUCTION OF TAX DUE TO APPLICATION OF A DIFF ERENT SECTION IS TO BE TAKEN U/S.201 ETC. WITHOUT PREJUDICE, SINCE AML WAS ASSIGNED ANNUAL MAINTENANCE CONTRACT AT A FIXED MONTHLY RATE FOR PR EVENTIVE MAINTENANCE OF ALL THE MACHINERIES OF THE APPELLANT AS WELL AS BREAK DOWN AND CORRECTIVE MAINTENANCE AND OUT OF TOTAL PA YMENT MADE, PART OF THE PAYMENT WAS TOWARDS PREVENTIVE REPAIRS AND M AINTENANCE OF MACHINERY, ENTIRE PAYMENT, IN ANY CASE CANNOT BE SA ID TO BE TOWARDS RENDERING OF 'TECHNICAL SERVICES IN TERMS OF EXPL ANATION 2 BELOW SECTION 9(L)(VII), BOARD'S CIRCULAR NO.715 CLARIFI ES THAT FOR NORMAL MAINTENANCE CONTRACTS INCLUDING SUPPLY OF SPARES, S ECTION 194C WOULD APPLY, HOWEVER, WHERE TECHNICAL SERVICES ARE RENDER ED, SECTION 194J WOULD APPLY. THE MATTER REGARDING SHORT DEDUCTION O F TAX AT SOURCE, IF ANY DUE TO APPLICATION OF DIFFERENT SECTION NEEDS T O BE DEALT WITH BY THE ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 5 - AO U/S 201 ETC. FOR APPROPRIATE ACTION. AS FAR AS, DISALLOWANCE U/S.40(A)(IA) OF 1,39,79,719/- IS CONCERNED, THE SAME IS CANCELLED. 3.2. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE I S NOW IN APPEAL BEFORE US. 4. BEFORE US, LD.SR.DR SUPPORTED THE ORDER OF AO. LD.AR, ON THE OTHER HAND, SUBMITTED THAT THE ISSUE IN THE PRESENT CASE IS DIRECTLY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF TRIBUNAL ( ITAT D BENCH AHMEDABAD) IN ASSESSEES OWN CASE FOR AY 2008-09 IN ITA NO.2722/AHD/2011, DATED 01/01/2016. HE PLACED ON R ECORD THE COPY OF THE AFORESAID ORDER AND POINTED OUT TO THE RELEVANT FINDINGS OF THE TRIBUNAL. HE THEREFORE SUBMITTED THAT NO INTERFERE NCE TO THE ORDER OF THE LD.CIT(A) ON THIS GROUND IS CALLED FOR. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO D ISALLOWANCE U/S.40(A)(IA) ON THE AMOUNT PAID BY AML FOR SHORT DEDUCTION OF TA X. WE FIND THAT ON IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR AY 2008- 09, THE ISSUE WAS DECIDED BY THE COORDINATE BENCH OF TRIBUNAL IN ASSE SSEES FAVOUR BY HOLDING AS UNDER:- ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 6 - 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE I S WITH RESPECT TO DISALLOWANCE OF EXPENSES U/S. 40(A)(IA) OF THE A CT. WE FIND THAT LD. CIT(A) WHILE DECIDING THE APPEAL HAD NOTED THAT IDENTICAL ISSUE AROSE IN THE CASE OF ASSESSEE FOR A .Y. 2007-08 AND HE FOLLOWING THE ORDER OF HIS PREDECESSOR FOR A .Y. 2007-08 DELETED THE ADDITION MADE A.O. WE FURTHER FIND THA T THE ORDER OF LD. CIT(A) FOR A.Y.07-08 WAS UPHELD BY THE CO-ORDIN ATE BENCH OF TRIBUNAL AND AGAINST WHICH REVENUE HAD PREFERRED APPEAL BEFORE HONBLE GUJARAT HIGH COURT, HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO. 1237 OF 2014 (SUPRA) DISMIS SED THE APPEAL OF THE REVENUE BY HOLDING AS UNDER:- 3. HEARD THE LEARNED ADVOCATE APPEARING FOR THE APPELL ANT-REVENUE AND CONSIDERED THE SUBMISSIONS. LEARNED ADVOCATE APPEAR ING FOR THE APPELLANT HAS CONTENDED THAT THE CIRCULAR ISSUED BY CBDT IS V ERY CLEAR AND THE ISSUE IS GOVERNED BY SECTION 194J. THE LEARNED CIT(A) AS WELL AS ITAT, WHILE CONSIDERING THE QUESTION HAS OBSERVED IN PARA-17 AS UNDER: 17. AFTER HEARING BOTH THE PARTIES AND PERUSING TH E RECORD, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT IN RESPECT OF PAYMENT MADE BY ASSESSEE TO M/S. ELECON INFORMATION TECHNOLOGY LTD. (EITL) AND M/S. AKAAISH MECHATONICS LTD. (AML) THESE WAS SHORT DEDU CTION OF TAX AND THEREFORE THE RATIO OF THE TRIBUNAL IN THE CASE OF APOLLO TYPES LTD. V. DCIT AND UE TRADE CORPORATION (INDIA) LTD. IS DIRECTLY A PPLICABLE TO THE FACTS OF THIS CASE. IN THE CASE OF UE TRADE CORPORATION V . DCIT, THE HONBLE TRIBUNAL IN SIMILAR FACTS HAS HELD AS UNDER:- 6.WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH T HE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE TAX AUDIT REPORT IN FORM NO. 3CD PLACED AT PAGES 20 TO 49 OF THE PAP ER BOOK. ANNEXURE-XIV OF THE TAX AUDIT REPORT GIVES THE DETA ILS OF TAX DEDUCTIBLE UNDER VARIOUS SECTIONS OF THE ACT. PAGE 1 OF ANNEXURE-XIV GIVES THE DETAILS OF PAYMENTS ON WHICH TAX HAS NOT BEEN DEDUCTED AT ALL. THE TOTAL AMOUNT OF EXPENDITURE IS AT RS.7,32 ,827/-. PAGES 2 TO 6 OF ANNEXURE-XIV GIVE THE DETAILS WHERE THERE IS A SHORTFALL DUE TO LESSER DEDUCTION THAN REQUIRED TO BE DEDUCTED. THE TOTAL AMOUNT OF EXPENSES IS AT RS. 20,24,455/- ON WHICH SHORTFALL O F TAX AT RS. ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 7 - 3,26,011/- HAS BEEN WORKED OUT BY THE TAX AUDITORS: PAGE 3 OF THE ANNEXURE GIVES THE DETAILS WHERE TAX HAS BEEN DEDUC TED BUT NOT PAID TO THE CREDIT OF THE CENTRAL GOVERNMENT, THE ASSESSEE HAS ADDED BACK THE EXPENDITURE ON WHICH TAX WAS DEDUCTIBLE BUT NO TAX WAS DEDUCTED AT ALL AND ALSO WHERE TAX WAS DEDUCTED AT SOURCE BUT N OT PAID TO THE CREDIT OF CENTRAL GOVERNMENT AMOUNTING TO RS. 20,16 ,778/-. DETAILS OF SUCH EXPENDITURE IS GIVEN AT PAGE 1 AND PAGE 3 OF T HE ANNEXURE-XIV TO THE TAX AUDIT REPORT. THE LD. AR OF THE ASSESSEE HA S CLAIMED THE BENEFIT OF TWO DECISIONS, ONE BY THE KOLKATA BENCH AND OTHER BY THE MUMBAI BENCH OF ITAT. IN THE CASE OF DCIT VS. CHAND ABHOY S JASSOBHOY (SUPRA) THE ASSESSEE MADE PAYMENT TO THE CONSULTANTS BY WAY OF SALARY AFTER DEDUCTION OF TAX AT SOURCE UNDE R SEC. 192 AND CLAIMED THE DEDUCTION FOR THE SAME. THOSE CONSULTAN TS WERE WORKING FOR A PERIOD OF TWO YEARS WITH THE ASSESSEE. HOWEVE R, THE AO APPLIED THE PROVISIONS OF SEC. 194J. IN THIS CASE IT WAS HE LD THAT PROVISIONS OF SEC. 192 WERE APPLICABLE TO THE FACTS OF THE CASE. ANOTHER DECISION RELIED UPON BY THE ASSESSEE IS OF KOLKATA BENCH IN THE CASE OF DCIT VS. S.K. TEKRIWAL (SUPRA) . IN THIS CASE ALSO THE DIFFE RENCE IN SHORTFALL WAS DUE TO THE APPLICABILITY OF PROVISIONS. THE ASSESSE E HAS DEDUCTED TAX AT SOURCE U/S. 194C WHEREAS ACCORDING TO THE ASSESSING OFFICER PROVISIONS OF SECTION 1941 ARE APPLICABLE. THUS THE ASSESSEE'S CASE IS COVERED BY THE DECISIONS OF THE TRIBUNAL REFERRED T O ABOVE. NO DOUBT ASSESSEE IS IN DEFAULT AS PER PROVISIONS OF SEC. 20 1 BUT DISALLOWANCE OF THE EXPENDITURE IS NOT PERMISSIBLE U/S. 40(A)(IA), RESPECTFULLY FOLLOWING THE PRECEDENTS IT IS HELD HAT DISALLOWANCE OF RS. 2 0,24,455/- IS NOT JUSTIFIED. THE ASSESSING OFFICER IS DIRECTED TO DEL ETE THE ADDITION. IN VIEW OF THE ABOVE, THE ORDER PASSED BY LD. CIT(A ) DELETING THE ADDITIONS OF RS. 60,60,960/- AND RS. 8,86,940/- IS HEREBY UPH ELD. BOTH THESE GROUNDS OF REVENUE ARE DISMISSED. 4. IN THAT VIEW OF THE MATTER, THE SAME VIEW IS CONFI RMED BY THE TRIBUNAL IN ITS ORDER, AND THEREFORE, WE ARE IN COMPLETE AGREEM ENT WITH THE ORDER PASSED BY THE TRIBUNAL. NO SUBSTANTIAL QUESTION OF LAW IS MADE OUT AND THE APPEAL IS DEVOID OF ANY MERITS AND DESERVES TO BE D ISMISSED. HENCE, THIS APPEAL IS DISMISSED. 6. BEFORE US, REVENUE HAS NOT PLACED ANY CONTRARY B INDING DECISION IN ITS SUPPORT NOR HAS CONTROVERTED THE FINDINGS OF LD.CIT (A). WE THEREFORE SEE NO ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 8 - REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 7. SECOND GROUND IS WITH RESPECT TO DISALLOWANCE U/ S.40(A)(IA) IN RESPECT OF PAYMENTS MADE TO CLEARING HOUSE AGENTS. 7.1. AO NOTICED THAT DURING THE YEAR ASSESSEE HAS MADE PAYMENTS OF RS.36,66,688/- TO EXPRESS TRANSPORT PVT.LTD. (ETPL) A CLEARING AND FORWARDING AGENT AND HAD REIMBURSED THE EXPENSE BUT ON REIMBURSEMENT OF EXPENSES AMOUNTING TO RS.30,83,507 /- ASSESSEE HAD NOT DEDUCTED TDS. AO WAS OF THE VIEW THAT THE PAYM ENTS MADE TO CLEARING AND FORWARDING AGENT, EVEN ON ACCOUNT OF REIMBURSEMENT OF EXPENSES ARE SUBJECT TO TDS. HE THEREFORE CONCLUDE D THAT SINCE THE ASSESSEE HAS FAILED TO DEDUCT THE TDS ON THE REIMBU RSEMENT OF EXPENSES AGGREGATING TO RS.30,83,507/-, THE EXPENSE IS LIAB LE FOR DISALLOWANCE U/S.40(A)(IA) OF THE ACT. HE ACCORDINGLY DISALLOWE D THE PAYMENT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO DELETED THE ADDITION BY HOLDING AS U NDER:- 5.7. THE DCIT, ANAND CIRCLE, ANAND IN HIS ABOVE RE PORT DATED 16/01/2013 HAS STATED THAT THE TOTAL AMOUNTS IN RES PECT OF BILLS RAISED BY C & F AGENTS DURING THE AY 2009-10 PURELY FOR REIMB URSEMENT OF ACTUAL EXPENSES IS OF 30,83,507/- AND THERE IS NO ANY ELEMENT OF INCOME IN SUCH REIMBURSEMENT TRANSACTIONS. SINCE, T HE AO ON THE BASIS OF VERIFICATION OF RELEVANT BILLS AND VOUCHERS AND BOOKS OF ACCOUNT OF THE APPELLANT HAS SUBMITTED THAT THE BILLS RAISED BY THE CHA IN RESPECT OF AMOUNT OF 30,83,507/- ARE PURELY FOR REIMBURSEMENT AND ACTUAL EXPENSES ONLY AND THEREFORE, FOLLOWING THE ABOVE DE CISION OF THE ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 9 - HON'BLE ITAT, 'D' BENCH AHMEDABAD IN ITS ABOVE REFE RRED ORDER, IT IS HELD THAT SECTION 40(A)(IA) OF THE IT ACT IS NOT AP PLICABLE IN RESPECT OF THIS REIMBURSEMENT AMOUNT OF 30,83,507/-. CONSIDERING THIS FACT, I THEREFORE, DELETE THIS ADDITION OF 30,83,507/- AS MADE BY THE AO U/S 40(A)(IA) OF THE IT ACT. THUS THE SECOND GROUND OF APPEAL OF THE APPELLANT IS ALLOWED. THE AO ON PAGE NO.4 OF HIS AS SESSMENT ORDER HAS MENTIONED THAT MOREOVER, THE TDS OF 69,873/- CLAIMED TO HAVE BEEN DEDUCTED AND PAID ON 11/10/2010 IS NOT PAID WITHIN THE PRESCRIBED LIMIT FOR PAYMENT OF TDS DEDUCTED. HOWEVER, ON THE OTHER HAND, THE AO HAS MENTIONED THAT THE ABOVE PAYMENTS OF 30,83,507/- WHICH HAVE BEEN MADE TO CLEARING AND FORWARDING AGENTS WITHOUT TDS DEDUCTION. IT SEEMS THAT THE AO HAS NOT MADE SEPARATE DISALLOWANC E OF CORRESPONDING EXPENDITURE U/S 40(A)(IA) OF THE IT ACT ON WHICH TDS OF 69,873/- THOUGH HAS BEEN DEDUCTED BUT NOT PAID ON OR BEFORE THE DUE DATE OF FILING OF RETURN. .IN THIS REGARD, THE AO M AY TAKE NECESSARY ACTION IN ACCORDANCE WITH THE PROVISIONS OF INCOME- TAX ACT. 7.1. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE I S NOW IN APPEAL BEFORE US. 8. BEFORE US, LD.SR.DR SUPPORTED THE ORDER OF AO. LD.AR, ON THE OTHER HAND, SUBMITTED THAT ON IDENTICAL ISSUE IN AS SESSEES OWN CASE IN AY 2008-09, THE ISSUE WAS DECIDED IN FAVOUR OF ASSE SSEE BY THE COORDINATE BENCH OF TRIBUNAL (ITAT D BENCH AHMEDA BAD) IN ITA NO.2674/AHD/2011, DATED 07/08/2015. HE PLACED ON R ECORD THE COPY OF THE SAID ORDER AND POINTED TO THE RELEVANT PORTION OF THE ORDER. HE THUS SUPPORTED THE ORDER OF LD.CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DI SALLOWANCE U/S.40(A)(IA) ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 10 - OF THE ACT ON ACCOUNT OF NON-DEDUCTION OF TDS ON TH E REIMBURSEMENT OF EXPENSES TO CLEARING AND FORWARDING AGENT. WE F IND THAT AN IDENTICAL ISSUE AROSE IN ASSESSEES OWN CASE IN AY 2008-09 AN D WHEN THE MATTER WAS CARRIED BEFORE THE COORDINATE BENCH OF TRIBUNAL , THE ISSUE WAS DECIDED IN FAVOUR OF ASSESSEE BY THE COORDINATE BEN CH IN ITA NO.2674/AHD/2011 ORDER DATED 07/08/2015 BY HOLDING AS UNDER:- 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE CASE LAW. THE SOLE ISSUE IN THE PRESENT CASE IS THAT OF TDS DEDUC TION. THE ASSESSEE PAID GROSS AMOUNT OF RS. 16,56,989/- TO M/S ETPI, I TS CLEARING AND FORWARDING AGENT. IT DEDUCTED TDS QUA A SUM OF RS.5 ,23,855/-. THE BALANCE AMOUNT IN QUESTION OF RS.11,33,134/- WAS ST ATED TO BE REIMBURSEMENT OF MISCELLANEOUS EXPENDITURE ONLY. TH E ASSESSING OFFICER WAS OF THE VIEW THAT THE SAME HAD TO BE SUB JECTED TO TDS U/S. 194C OF THE ACT EVEN IN CASE OF REIMBURSEMENT. THE CIT(A) ADOPTS A DIFFERENT VIEW IN THE IMPUGNED ASSESSMENT TO THAT I N THE PRECEDING ASSESSMENT YEAR FOR HOLDING THAT NO TDS IS REQUIRED TO BE DEDUCTED IN CASE OF REIMBURSEMENTS IN QUESTION SINCE THERE IS N O INCOME ELEMENT EMBEDDED THEREIN. HOWEVER, HE HOLDS THAT THE ASSESS EE'S SHIP LINE BILLS ETC. ARE TO BE SUBJECTED TO TDS. WE FIND THIS LATTE R OBSERVATION TO BE NOT CORRECT. THE ASSESSEE'S STAND THROUGHOUT HAS BEEN T HAT SUCH SHIPPING PAYMENTS DO NOT REQUIRE TDS DEDUCTION AS PER THE BO ARDS CIRCULAR NO. 723 DATED 01-09-1995 EXCLUDING OPERATION OF THE REL EVANT TDS PROVISIONS. BOTH THE LOWER AUTHORITIES FAIL TO REBU T THIS CONTENTION ON FACTS AND LAW. WE ACCORDINGLY HOLD THAT THE CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO CONSIDER ASSESSEE'S SHIPPI NG LINE BILLS FOR THE PURPOSE OF TDS DEDUCTION. THE CASE FILE REVEALS THA T A COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR PRECEDIN G ASSESSMENT YEAR IN ITA 2825/AHD/2010 DECIDED ON 29-04-2014 HOLDS SIMIL AR REIMBURSEMENTS MADE TO BE VERY PAYEE AS NOT COVERED BY TDS PROVISIONS. THE REVENUE FAILS TO POINT OUT ANY DIST INCTION ON FACTS. WE OBSERVE IN THESE CIRCUMSTANCES THAT THE COMMISSIONE R OF INCOME TAX(A)'S ACTION IN PART IS NOT LIABLE TO BE UPHELD ON BOTH COUNTS I.E. ITA NO. 923/AHD /2013 DY.CIT VS. PRAYAS ENGINEERING LTD. ASST.YEAR 2009-10 - 11 - MERITS AS WELL AS JUDICIAL CONSISTENCY. THE ASSESSE E'S SOLE SUBSTANTIVE GROUND SUCCEEDS. 9.1. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF LD.CIT(A) NOR HAS PLACED ANY CONTRARY BINDING DECISION. IN VIEW OF THE AFORESAID FACTS, WE SEE N O REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 10. IN THE RESULT, REVENUES APPEAL IS DISMISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON 18/07/2016 SD/- SD/- () () (RAJPAL YADAV) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 18/ 07 /2016 3..,.../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. $& / THE APPELLANT 2. '($& / THE RESPONDENT. 3. 456 7 / CONCERNED CIT 4. 7 ( ) / THE CIT(A)-IV, BARODA 5. 89:'56 , 56/ , 4 / DR, ITAT, AHMEDABAD 6. :<=+ / GUARD FILE. / BY ORDER, (8' //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD