Appeal details
Counselvise Citation
[2013] 120 COUNSELVISE.COM (IT) 1942 (ITAT-NAGPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
10 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-02-2013
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
DB
Assessment Year
2007-2008
Appeal Filed On
20-03-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) . . , . / , . . BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER /AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 97/NAG/2012 / ASSESSMENT YEAR 2007-08 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4, ROOM NO. 301, SARAF CHAMBERS, NAGPUR. VS. M/S. JEJANI PULP & PAPER MILLS PVT. LTD., 136-A, SMALL FACTORY AREA, BHANDARA ROAD, BAGADGANJ, NAGPUR-08. PAN: AAACJ 9162 B ( / APPELLANT ) ( / RESPONDENT ) REVENUE BY : SHRI D.P. TIWARI ASSESSEE BY : NONE ! '#$ / DATE OF HEARING : 29-01-2013 %& ! '#$ / DATE OF PRONOUNCEMENT : 01-02-2013 '( / O R D E R PER RAJENDRA, AM FOLLOWING ARE THE GROUNDS OF APPEAL FILED BY THE AS SESSING OFFICER (AO) AGAINST THE ORDER DT. 07-12-2011 OF THE CIT(A)-II, NAGPUR. 1. ON THE FACTS AND CIRCUMSTANCES OF CASE, THE CIT (A) - II , NAGPUR E RR E D IN DELETING THE ADDITION MADE BY AO BY INVOKING SECT I ON 40(A)(IA) O F T HE I T ACT , 1961 TO THE EXTENT OF RS 5 , 72,496/ - . 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE CIT(A) ERRED IN HOLDIN G THAT CHA & C & F AGENT OF ASSESSEE WAS AN ' AGENT OF NON - RESIDENTS SHIP OWNERS' WITHIN THE MEANING OF SECTION 172 OF THE IT ACT, 1961 . 3. IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, WHEN OCEAN FR EIG HT/ SHIPPING CHARGES HAVE NOT BEEN PAID TO NON-RESIDENT SHIP OWN E R OR HIS AGENT THE QUESTION OF APPLICABILIT Y SECTION 172 OR CIRCUL A R NO . 7 2 3 D OES NOT ARISE AND TO THIS EXTENT THE CIT(A) OUGHT NOT T O HA V E GR A NT E D A N Y RELIEF . ITA NO. 97/NAG/2012 M/S. JEJANI PULP & PAPER MILLS P. LTD 2 4. CIT(A) OUGHT TO HAVE RECOGNIZED THAT THERE WAS A CONTRACT BE TWE EN THE ASSESSEE AND THE C & F AGENT WHICH IS SQUARELY COVERED B Y C IRCULAR NO. 558/28.03 . 1990 AND CIRCULAR 715/08.08.1985 AND SECTION 194C O F T H E I . T . ACT , 1961 . 5. IN TH E FACTS AND IN THE CIRCUMSTANCES OF THE C A SE , CIT(A) OUGHT TO HAVE HELD THAT ON THE GROSS AMOUNT PAID TO THE CHA & C & F AGENTS , TDS OUGHT TO HAVE BEEN DEDUCTED , AS PER SECTION 194C OF THE I.T. ACT , 1961 . 6. THE CIT(A) OUGHT NOT TO HA V E GRANTED RELIEF WITHOUT EXAMINING THE RECORD / CASE OF C & F AGENT AS TO WHETHER HE CL A IM E D APPLICATION OF SECTION 172 OR 163 IN HIS CASE ON THE PAYMENTS MADE BY HIM OUT OF RECEIPTS FROM ASSESSEE . 7. CIT(A) ERRED IN IGNORING THE DEFINITION OF PROFE SSION A L SERVIC E S A ND TECHNICAL SERVICES CONTAINED IN SECTION 194J AND AP PLIED THE S A ID S E CT I ON WITHOUT ANY BASIS . 8. C I T(A) ERRED IN IGNORING THE PROVISIONS OF TDS WHICH A RE APPLI CA BL E ON THE GROUND RENT AND DETENTION CHARGES. 9. CIT(A) ERRED IN CONSIDERING CERTAIN PAYMENTS AS REIMBURSEMENT AND EXCLUDING THEM FROM THE SCOPE OF TDS, WHICH IS NOT ACCORDANCE W ITH L A W . 10. ANY OTHER GROUND THAT MAY BE TAKEN AT THE TIME OF HEARING THE APPE A L. 2. FACTS OF THE CASE: ASSESSEE HAD FILED RETURN OF INCOME FOR THE ASSESSM ENT YEAR (AY) 2007-08 ON 29-10-2007 DECLARING INCOME OF RS. 14,02,620/-. TH E ASSESSEE-COMPANY IS ENGAGED IN MANUFACTURING OF PULP & PAPER AND TRADING OF NOT E BOOKS, WASTE PAPERS ETC., RETURN WAS PROCESSED ON 28-11-2008 U/S. 143(1) OF T HE INCOME TAX ACT 1961, (ACT). 3. DURING THE COURSE OF SCRUTINY, ASSESSING OFFICER ( AO) NOTICED THAT ASSESSEE HAS MADE PAYMENT TO FOLLOWING CLEARING HOUSE AGENT (CHA). TRANSTECH INC. RS. 1,61,303/- PAPERSE INT. RS. 88,727/- TANGO IMPLEX RS. 4,09,966/- OUT OF THE ABOVE PAYMENT, ASSESSEE HAD ONLY DEDUCT ED TDS ON TRANSPORTATION PAYMENT OF RS. 87,500/- & TDS ON AGENCY CHARGES OF RS. 9,428/-. 4. AO ASKED THE ASSESSEE-COMPANY VIDE ORDER SHEET ENT RY DT. 23-11-2009 AS TO WHY TDS U/S. 194C WAS NOT MADE ON THE AGGREGATE PAY MENT TO THE ABOVE PARTIES. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, AO HELD THAT ASSESSEE HAD MADE SINGLE PAYMENT TO THE CHA AGENTS AND THIS PAYMENT T O CHA WAS IN THE NATURE OF SERVICE CONTRACT AND WAS COVERED U/S. 194C OF THE A CT, THAT THE CONTENTION OF THE ASSESSEE WAS THAT THE PROVISION OF SECTION 172 WAS APPLICABLE IN THIS CASE WAS NOT CORRECT, THAT SECTION 172 WAS APPLICABLE FOR THE PA YMENT MADE TO THE AGENT OF FOREIGN SHIPPING COMPANIES, THAT CHA THAT WERE NOT THE AGEN T OF FOREIGN SHIPPING COMPANIES THEREFORE PROVISION OF SECTION 172 WERE NOT APPLICA BLE. IN VIEW OF THE ABOVE, ITA NO. 97/NAG/2012 M/S. JEJANI PULP & PAPER MILLS P. LTD 3 DISCUSSION AMOUNT OF RS. 5,72,496/- WAS DISALLOWED U/S. 40(A)(IA) OF THE ACT AND ADDED TO THE INCOME OF THE ASSESSEE. 5. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HE HELD THAT ASSESSEE HAD DEDUCTED TDS ON TRANSPORTATION AND AGENCY COMMISSION PAID TO CHA, THAT THE ONLY POINT OF DISPUTE WAS NON-DEDUCTION OF TDS PAYMENT OF INLAND HUALAGE CHARGES OF RS. 4,90,111/- AND PAYMENT TO FOREIGN SHIPPING LINES ON BEHALF OF THE APPELLANT FOR TERMINAL HANDLING CHARGES OF RS. 50,493/- AND ADMIN ISTRATIVE AND OTHER EXPENSES LIKE DOCUMENTATION CHARGES, STAMP DUTY AND GROUND R ENT AND DETENTION CHARGES, THAT ALL THESE FORMED PART OF PURCHASE PRICE OF APPELLAN T. RELYING ON THE ORDER OF THE ITAT DELIVERED IN THE ASSESSEES OWN CASE FOR THE AY 200 5-06 (ITA NO. 125/NAG/2009), HE HELD THAT PROVISIONS OF SECTION 172 OF THE ACT AND CIRCULAR NO. 723 DT. 19-09- 1995, WERE APPLICABLE IN THE CASE UNDER CONSIDERATI ON, THAT SUCH PAYMENTS WERE EXEMPT FROM PROVISIONS OF TAX DEDUCTION AT SOURCE A ND HENCE NOT LIABLE FOR TDS U/S. 194C. FINALLY, HE DELETED THE DIS-ALLOWANCES MADE BY AO U/S. 40(A)(IA) OF THE ACT. 6. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDER OF THE AO. WE HAVE PERUSED THE MATTER BEFORE US. AS THE MATTE R HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE AND THE FAA HAS RIGHTLY FOLLOWED THE SAME, SO WE DO NOT WANT TO INTERFERE WITH HIS ORDER. FOLLOWING THE ORDER OF THE TRIBUNAL FOR THE AY. 2005-06, WE DECIDE GROUND NOS. 1 TO 9 AGAINST T HE AO. AS A RESULT, APPEAL FILED BY THE AO STANDS DISMISSE D. ) *+ , -# / '01 ! * 23 ! ' 45. ORDER PRONOUNCED BY E-BENCH AT MUMBAI ON THIS 1 ST DAY OF FEBRUARY, 2013 *7 0+' - 789 / 1 ST FEBRUARY 2013 & '( %&:' ; . SD/- SD/- ( . . / R.K. GUPTA ) ( / RAJENDRA ) '+ / JUDICIAL MEMBER $ '+ / ACCOUNTANT MEMBER *7 MUMBAI, ;' DATE: 1 ST FEBRUARY, 2013 TNMM ITA NO. 97/NAG/2012 M/S. JEJANI PULP & PAPER MILLS P. LTD 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE :' ' //TRUE COPY// BY ORDER, ASST. REGISTRAR, ITAT
