TMI Blog2016 (4) TMI 1419X X X X Extracts X X X X X X X X Extracts X X X X ..... AT MUMBAI] . Now, Hon ble P H High court also in the case of PMS Diesel [ 2015 (5) TMI 617 - PUNJAB HARYANA HIGH COURT] have reinforced the aforesaid view taken by the Tribunal by concurring with the decision of Hon ble Calcutta High Court and explaining the decision of the Hon ble Allahabad High Court in the case of Vector Shipping Services Pvt. Ltd. [ 2013 (7) TMI 622 - ALLAHABAD HIGH COURT] and specifically held that the decision of Special Bench in the case of M/s. Merilyn Shipping Transports is not a correct decision. Accordingly, the order of the CIT(A) is reversed. TDS u/s 194C - As payment made by the assessee towards freight was within the statutory limits of attracting TDS provision and in support, assessee has disclosed and filed the details of payments, party-wise and month-wise payments; secondly, the assessee has also filed the copy of vehicle registration certificate, PAN card of the parties to substantiate the contention raised before the AO, who has held that, no details were filed - the assessee has also filed Form 15-I and 15-J to show that, the income of the transporters were below taxable limits. CIT(A) without any proper reason and analysis h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ber and amount paid. As per provisions of section assessee has submitted name and address of the person to whom freight/transportation charges paid. In case the owner is having less than two lorries and amount received less than ₹ 50,000/- during the year than the copy of form 15-I regarding the declaration collected from the owner and the same should have submitted to the concerned authority and in case TDS has not deducted than the above details is required to be submitted before making the assessment. The assessee has not submitted the same till date. 2. The assessee has submitted list of vehicles number and amount paid without date of payment, destination of transportation, with name and address of owner and copies of form No.15-I filed to the respective authority. 3. In the audit report the author has not make any comments on the TDS provisions applicable. 4. Assessee is a contractor/sub-contractor and the received freight. The assessee has deposited the entire freight in his bank and from made payment by cash/cheques. It proves that assessee is a contractor / sub-contractor. It is their obligatory duty to verify/apply the provisions of section 194C(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the freight receipts are shown at ₹ 3,51,64,121/- and hiring charges paid are reflected at ₹ 3,39,60,169.70. This figure when cross checked with Profit Loss Account filed with return of income filed for AY 2009-10 it is noted that the gross receipts of business are reflected at ₹ 3,61,54,120/- and freight paid at ₹ 3,39,60,170/-. There return shows debtors as on 31.3.2009 at Nil and the creditors are shown at ₹ 23,89,429/-. Then it is also noted that figure of sundry creditors does not go in line if opening balance as on 01.04.2008 is considered as per the Return of Income filed in immediately preceding AY i.e. 2008-09, when figures of closing balance of sundry creditors are shown at ₹ 23,16,019/- as on 31.03.2008. In other words if opening balance of sundry creditors is taken at ₹ 3,39,60,169/- during the FY 2008-09, it leaves a closing balance of sundry creditor of ₹ 36,18,386/- as on 31.3.2009 in place of ₹ 23,16,019/-. The reason for difference is that opening balance as on 01.04.2008 is taken by the appellant wrongly at ₹ 10,87,062/- only; in his hire of charges account in the books against sundry creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o explained the ratio of Allahabad High Court decision in the case of Vector Shipping Services Pvt. Ltd. 7. After considering the aforesaid submissions of Ld. DR and relevant finding given in the impugned orders, we find that the Ld. CIT(A) has given part relief following the ratio laid down by the Special Bench decision in the case of Merlyn Shipping Transport Private Limited (supra). The contrary view has been taken by the Hon ble Calcutta High Court in the case of Crescent Exports (supra) disapproving the decision of the Special Bench and held that, provision of section 40(a)(ia) would apply on both paid and payable . The decision of Allahabad High Court in the case of Vector Shipping Services Pvt. Ltd. in ITA No. 122 of 2013 is not a ratio approving the decision of Special Bench and this has been elaborately dealt by the Tribunal in the case of M/s Pratibhuti Viniyog Ltd. The relevant observation and finding of the Tribunal reads as under:- 7. We have heard the rival contentions. On a perusal of the order of the Hon ble Allahabad High Court in Vector Shipping Services Pvt. Ltd., ITA no.122 of 2013, judgment dated 9th July 2013, it is seen that only question of law whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on given by the Special Bench. On the contrary, we find that the Hon ble Calcutta High Court in CIT v/s Crescent Exports Syndicate, [2013] 262 CTR (Cal.) 525, has specifically examined the correctness of the majority view of Marilyn Shipping and disapproved the view taken by the Special Bench in the following manner:- The High Court examined the correctness of the majority views in the case of Merilyn Shipping. The main thrust of the majority view was based on the fact that the Legislature has replaced the expression amounts credited or paid with the expression 'payable' in the final enactment. Comparison between the pre-amendment and post amendment law is permissible for the purpose of ascertaining the mischief sought to be remedied or the object sought to be achieved by an amendment. But the same comparison between the draft and the enacted law is not permissible. Nor can the draft or the bill be used for the purpose of regulating the meaning and purport of the enacted law. It is the finally enacted law which is the will of the legislature. CIT vs. Kelvinator reported in 2010(2) SCC 723, relied on. The Tribunal fell into an error in not realizing this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treat the payments made or credited in favour of a contractor or subcontractor differently than the payments on account of interest, commission or brokerage, fees for professional services or fees for technical services because the words amounts credited or paid were used only in relation to' a contractor or sub-contractor. This differential treatment was not intended. Therefore, the legislature provided that the amounts, on which tax is deductible at source under Chapter XVII-B payable on account of interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services or to a contractor or subcontractor shall not be deducted in computing the income of an assessee in case he has not deduced, or after deduction has not paid within the specified time. The language used by the legislature in the finally enacted law is clear and unambiguous whereas the language used in the bill was ambiguous. There can be no denial that the provision in question is harsh. But that was no ground to read the same in a manner which was not intended by the legislature. The contention that the second proviso sought to become effective from 1st April, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such understanding of the language used by the legislature should waver on the premise that as propounded by the Tribunal, this was a case of conscious omission on part of the Parliament. If one looks closely to the provision, in question, adverse consequences of not being able to claim deduction on certain payments irrespective of the provisions contained in Sections 30 to 38 of the Act would flow if the following requirements are satisfied:- (a) There is interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to resident or amounts payable to a contractor or sub-contractor being resident for carrying out any work. (b) These amounts are such on which tax is deductible at source under Chapter XVII-B. (c) Such tax has not been deducted or after deduction has not been paid on or before due date specified in sub-Section (1) of Section 39. U/s 40(a)(ia) the term used is interest, commission, brokerage etc. is payable to a resident or amounts payable to a contractor or sub-contractor for carrying out any work. The language used is not that such amount must continue to remain payable till the end of the accounting yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y provision before and what changes the legislature brought about and compare the effect of the two. The other occasion for applying the principle, has been when the language of the legislature is compared with some other analogous statute or other provisions of the same statute or with expression which could apparently or obviously been used if the legislature had different intention in mind, while framing the provision. Tribunal committed an error in applying the principle of conscious omission in the present case. Firstly, Court have serious doubt whether such principle can be applied by comparing the draft presented in Parliament and ultimate legislation which may be passed. Secondly, the statutory provision is amply clear. Section 40(a)(ia) would cover not only to the amounts which are payable as on 31th March of a particular year but also which are payable at any time during the year. Of course, as long as the other requirements of the said provision exist. M/s. Merilyn Shipping Transports v/s ACIT, incorrect law. Bhuwalka Steel Industries Ltd. vs. Bombay Iron and Steel Labour Board 2010 (Suppl.) 122, Agricultural Produce Market Committee, Narela, Delhi vs. Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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