TMI Blog2005 (10) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... carrying out as agent for octroi collections. In the original return as well as in the revised return, the assessee s source of income has been declared under the head Income from Business or Profession . During the course of assessment, assessee filed a letter, stating that notice under sections 143(2) and 142(1) issued by the Assessing Officer were based on a non est return filed by the assessee on 28-2-2001. The Assessing Officer rejected the above claim. 5. The Assessing Officer was of the opinion that assessee was carrying out an activity as agent for collection of octroi duty and the activity of the assessee is rather professional than commercial. He held that assessee s activity comes within the ambit of section 2(13) as defined in the Income-tax Act. He held that assessee has not disputed the fact that the assessee was chargeable to tax under the head Business . The Assessing Officer held the collection of octroi duty needs a specialized knowledge and skill in that particular line and, therefore, it can easily be characterized as professional income. The assessee is not doing any manufacturing, trading or has carried out any other activity, which under any stretch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose businesses are professions, the profits of which are dependent mainly upon the personal qualifications and in which no capital expenditure is required and this definition is strictly applicable to the facts of the assessee s case. The assessee is acting only as an authorised representative of various business groups/parties for pleading their cases before Municipal Authorities for getting their refunds on account of excess octroi paid is nothing but a profession discharging of duties. He held, whether the assessee is illiterate or qualified does not matter. The assessee is doing work of similar nature of an advocate or CA, of course without under notification or registration with a body. The assessee does not need that high qualification but assessee needs experience. According to the Board circular No. SO 18(E) dated 12-1-1977, authorised representatives are also professional. Authorized Representative means a person who represents any other person, on payment of any fees or remuneration, before the Tribunal or any authority constituted or appointed by or under any law for the time being in force. The authorised agents of various businessmen who represent them before Municipa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : The nature of work of the Custom House Agent is very similar to that of the Clearing and Forwarding Agent. The Apex Court, in the case of Cochin Shipping Co. v. ESI Corporation AIR 1993 252 (SC) has held that "The activity of Shipping and Clearing Agent is a "Shop" for the purpose of Shop and Establishment Act. This is because the activity carried on by a shipping, clearing and forwarding agency is a commercial activity. The assistance rendered by the Clearing and Shipping Agent is those who import or export, by attending to the documentation and ensuring the clearance of goods cannot be regarded as profession based on intellectual attainments or personal service rendered on account of possession of specialized skill and knowledge based on higher learning and intellectual. The appellant is engaged in the similar activities to that of Custom House Agents but like the Custom House Agents, they are not required to attain any qualification to practice as Octroi Refund Agents. Therefore, one of the most important characteristic that distinguishes a businessman and professional, that of qualification, which is not a compulsion in case of an Octroi Refund Agent. Every Custom H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Custom House Agents. From the above, the learned counsel submitted that it is clear that the nature of work and activities performed by the Custom House Agent and Octroi Refund Agent are similar in nature. Custom House Agent is required to pass a special examination, whereas person like assessee acting as Octroi Refund Agent does not require to pass any particular exam. 9. On the other hand, the learned Departmental Representative supported the orders of the revenue authorities. 10. Considering the rival submissions and going through the orders of the revenue authorities, we are of the view that the view canvassed by the learned counsel is to be accepted. The assessee is to get regis- tered under Octroi Rules. We are of the view that the services rendered by the assessee is similar to the services rendered by the clearing house agents. One of the reasoning of the revenue authorities, treating assessee s activity is of business is that the services rendered by the assessee, first assessee has to get a registration and assessee represents the claims before the Commissioner. Rule 25 of Octroi Rules, 1965 reads as under : "Transaction of business by a clerk or serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accountancy or technical consultancy or interior decoration or advertising or such other profession as is notified by the Board for the purposes of section 44AA or of this section; ( b )****** ( c )******" 12. The Board has notified under section 44AA, the following professions for the purpose of section 194J as under : ( a ) Profession of authorised representative. ( b )Profession of Film Artists (Cameraman, directors, music director, dance director, editor, singer, lyricist, story or screenplay writer and dress designer). ( c )Profession of company secretary. ( d )Profession of information technology. It is to be seen that assessee is not falling under the above notified profession. Authorised representative is specifically mentioned. There is no mention at all similar profession. Strictly the assessee is not an authorised representative. Another reason given by the revenue authorities to treat the assessee as a professional is that the assessee has not made any investment in terms of money, but mainly depends on assessee s personal skill like an advocate or a CA. Not making any investment in kind of cash alone is not the criteria to hold it is a profession. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was to look after all the refund claims of all the parties and render various services as well. He is the main person attending to the refund matters and other employees are kept for administrative matters. Commission was paid at the rate of 3.5 per cent only. However, the learned CIT(A) held, the payment of commission does not commensurate with the services rendered. Recipient of the commission is son of the assessee who was already getting salary and bonus. Assessee had other employees. Assessee was required to produce the list of employees giving their qualification and date of joining of the service and their salary. No details were given. He held, the mere existence of agreement between the assessee and its selling agents or paid of commission does not entitle them for such benefits, unless it is wholly and exclusively done for the business purposes. The learned CIT(A) held, Assessing Officer was justified in making the disallowances. However, he reduced the disallowance to Rs. 2,00,000 considering the fact that Shri Krishna Thakkar was a partner in the firm holding 40 per cent share in the business. Aggrieved by the above order, assessee is in appeal before us. 17. We hea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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