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2015 (2) TMI 980 - AT - Income TaxTDS on freight charges paid to agent of foreign shipping companies - CIT(A) deleted disallowance u/s. 40(a)(ia) - whether the provisions of section 172 are not overriding to provisions of section 194, and therefore, assessee was liable to deduct TDS? - Held that:- As relying on CIT vs. M/s. Orient Goa Pvt. Ltd. [2009 (10) TMI 575 - Bombay High Court]wherein held Section 172 comes under sub-title "H-Profits of non-residents from occasional shipping business". Title of Section 172 is "Shipping business of non-residents." For bringing a case under Chapter XV, H of the Act 1961, one has to establish a case of profits of non-residents from occasional shipping business. "Nonresident" is defined under section 2(30), as a person who is not a "resident" and for the purpose of Sections 92, 93 and 168, includes a person who is not ordinarily resident within the meaning of clause (6) of Section 6. The respondent assessee is a company, incorporated under the provisions of Indian Companies Act, 1956, is fairly an admitted position. The assessee cannot be said to be non-resident. Thus the respondent assessee cannot lay fingers on section 172, since we are not dealing with profits of non-residents. we set aside the order of CIT(A) qua this issue and restore the order of the AO. The disallowance is confirmed. - Decided against assessee. TDS on transport charges - CIT(A) deleted disallowance u/s. 40(a)(ia) on the ground that the recipients have paid the tax on the transportation charges collected from the assessee and therefore, no TDS was required to be deducted on the same payment - Held that:- There is no dispute that the resident transporters have paid the tax for transportation charges collected from the assessee. Therefore, we do not find any error in the order of CIT(A) in deleting the disallowance by following the judgment of Hon'ble Supreme Court in case of Hindustan Coca-cola Breweries (P) Ltd.(2007 (8) TMI 12 - SUPREME COURT OF INDIA ). It is pertinent to note that as per the 2nd proviso to section 40(a)(ia) no disallowance can be made in case where the payee has paid the tax on the said amount. Though, the said proviso is applicable w.e.f. 01/04/2013 however, in view of the judgment of Hon'ble Supreme Court we find that this amendment is remedial in nature and similar to the amendment under section 43B. The amended provision clearly support view that the expression “said due date” used in clause A of proviso to unamended section refers to time specified in Section 139(1) of the Act. The amended section 40(a)(ia) expands and further liberalises the statue when it stipulates that deductions made in the first eleven months of the previous year but paid before the due date of filing of the return, will constitute sufficient compliance. - Decided in favour of assessee. TDS on Machinery maintenance charges - CIT(A) deleted disallowance u/s. 40(a)(ia) - Held that:- Out of total expenditure of ₹ 92,700/- ₹ 51,000/- relates to the purchase of machinery parts, therefore, provisions of chapter XVII-B are not applicable so far as the expenditure relates to purchase of machinery parts. The remaining expenditure is comprising of several bills and the amount of one individual bills does not exceed ₹ 20,000/-. Accordingly we do not find any error or illegality in the impugned order of CIT(A). - Decided in favour of assessee. TDS on clearing and forwarding expenses - disallowance under section 40(a)(ia) - IT(A) deleted the disallowance made by the AO to the extent of reimbursement of expenses amounting to ₹ 4,19,505/- and confirmed the disallowance of the balance amount of ₹ 1,10,964/- Held that:- Plea of having no contract between assessee and C&F agency has been raised by the assessee for the first time before us.the grievance of the assessee before CIT(A) is only in respect of the amount of ₹ 4,19,505/- claimed to be reimbursement of expenses. The CIT(A) has accepted the said contention of the assessee and allowed to the extent of said amount of ₹ 4,19,505/-. Accordingly, the balance amount of ₹ 1,10,964/- was confirmed by CIT(A). As it is manifest from the record, that no such grievance was raised before CIT(A), and further, the fresh plea raised before this Tribunal required the finding of fact, whether any contract between the parties did exist or not. Even otherwise the payment of service charges to C&F agent is based on agreed rate/charges which constitute an agreement between the parties. Accordingly in the facts and circumstances of the case we do not find any merit or substance in the cross objection of the assessee hence, the same is dismissed. - Decided against assessee.
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