TMI Blog2014 (2) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... om the payments of freight is being made are non- residents or acting as agents of non-resident shipping companies - the provision of section 172 of the Act does not come into picture and assessee - Bill of Lading clearly mentioned the name of the Carrier and the name of the port in India – Decided against Revenue. Confirmation of addition paid to legal agents –Held that:- The portion of the amount paid to various Cargo Consultants towards consultancy charges recovered from the assessee - Some portion of the amount is towards reimbursement of expenses but the details are not available readily – thus, the CIT(A) has correctly confirmed the addition of this amount – Decided against Revenue. - ITA No. 1218/Chd/2011, Cross-objections No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed us to explain the reasons as to why TDS has not been deducted against Ocean Freights and other charges like, Inland Haulage Charges (IIHC) paid to EMU Lines Pvt. Ltd. Cross Link Cargo Management Pvt. Ltd. In this regard we respectfully submit as under:- In the books of accounts the assessee has maintained one account named as "Cartage Freight" in which total expenditure, on account of Inland freight, Ocean Freight, Inland Haulage Charges and other expenditure, has been debited. The total expenditure is Rs. 3670608.87. The breakup of total expenditure party wise is enclosed. The assessee has deducted TDS against Inland Freight charges paid to Jai Bhawani Cargo Carrier DHL Express. The assessee has not deducted TDS against Ocean Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ship hence the charges has not been paid to the owner of the ship. The agents are collecting the charges and remitting the same to the Foreign Shipping Companies therefore acting an agent. Once it is establish that the ship belongs to Foreign Shipping Companies and payment is made to agents then automatically Circular No. 723 will come into action. The Circular is very clear about the tax regulation of Foreign Shipping Companies. Section 172 is taking care of tax collection of Foreign Shipping Companies operating in India. As per section 172(8) Demurrage charges/handling charges or any other amount of similar nature is a part of amount against which tax has to be paid u/s 172(2). The Hon'ble Bench of Delhi Tribunal has held in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, the ld. counsel of the assessee reiterated the submissions made before the Assessing Officer and the ld. CIT(A). He also referred to the copies of the bills. Some of which have been enclosed along with the reply filed before the ld. CIT(A) (copy of the same available at pages 15-23 of the paper book) and pointed out that bills clearly show that the goods were sent to Germany through Foreign Shipping Line. 8 We have heard the rival submissions carefully . This issue has been adjudicated by the ld. CIT(A) vide paras 4 4.1 which reads as under: "4. I have carefully considered the contention of the Ld. Counsel for the appellant and perused the relevant record. The AO has observed that form the perusal of the wording of CBDT Circular N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purview of section 194C. Therefore, I delete the addition of Rs. 29,68,618.75 and uphold the addition of Rs. 4,44,368.06. This ground of appeal of the appellant is, therefore, partly allowed. " We are of the opinion that the ld. CIT(A) has correctly adjudicated the issue. We have also verified the copies of the bills of lading which clearly mention the name of carrier which shows that such carrier are Non Resident Companies. We have also perused circular no. 723 dated 19.9.1995 which reads as under: "Circular No. 723 Dated 19th September, 1995 1. Representations have been received regarding the scope of sections 172, 194C of the Income-tax Act, 1961 in connection with tax deduction at source from payments made to foreign shipping com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed is regarding confirmation of addition in respect of Rs. 4,40,368/- paid to legal agents. 11 After hearing both the parties we find that this portion of amount was not related to the payments to be made to Non Resident Companies and this was towards various charges charged by Cargo Consultants. 12 Both the parties were heard. 13 After considering the rival submissions we find that this portion of the amount paid to various Cargo Consultants towards consultancy charges recovered from the assessee. Some portion of the amount is towards reimbursement of expenses but the details are not available readily, therefore, we are of the view that the ld. CIT(A) has correctly confirmed the addition of this amount and accordingly we dismiss thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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