Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (7) TMI 660 - AT - Income TaxLiability to deduct tax u/s 1941 - AO has treated assessee in default with regard to non-deduction of tax at source in case of terminal handling charges, container freight station charges, Mumbai Port trust charges and Crane/Forklift charges - CIT(A) deleted liability - Held that:- CIT(A) has recorded a categorical finding of fact that in so far as terminal handling charges are concerned, the same has been paid by the assessee to foreign shipping lines or their agents on behalf and on account of its clients for which reimbursements were claimed. Such a payment does not constitute assessee’s own expenditure. These charges pertains to handling of material at the time of unloading of the cargo, thus, does not fall within the definition of ‘rent’, as set out in Explanation 1 to section 194I. There is no live link and rational nexus with such an expenditure to the use of any land, building or plant. Such charges received by the foreign shipping line are integral part of there Revenue generation from the operations of the ships and accordingly, they are chargeable to tax as profits of the shipping business. The Ld. CIT(A) has further noted that the assessee has noted particulars of payments made to shipping lines and to their agents and has held that they are not in the nature of rent. Finding of the CIT(A) on this score is upheld. Regarding Container Freight Station charges, Bombay Port Trust charges, the Ld. CIT(A) has discussed the relevant provisions of Custom’s Act and their Regulations made therein in connection with the grant of customs clearance. The payment made under these heads are more of a statutory nature under the regulation of Customs Act and the payment is made by the assessee only in the capacity of intermediary as approved by the Custom Department. It does not represent expenditure of the assessee but the expenditure of the clients handled by the assessee and it is only reimbursement of actual expense. Further, the goods, which passed through CFS do not belonged to the assessee and the services provided for handling till the clearance of the custom was not availed or utilized by the assessee but by the owner of the goods. Finding of the CIT(A) on this score is upheld. Regarding payments for grant of Crane/Forklift charges, the assessee’s case has been that, it is not rented any crane/Forklift albeit it engages the services of crane operators/contractors for loading/unloading of goods. The contractors engaged to use local labours to move the goods and use of crane/forklift and also engaged drivers/operators to drive these vehicles. The assessee does not have any right over any forklift/cranes. Thus, the nature of payment falls within the ambit of a contract within the meaning of section 194C for which the assessee has deducted TDS under the said section and the provisions of section 194I will not apply. The Ld. CIT(A) after discussing this issue in detail has held that such a payment does not entail deduction of TDS u/s 194I but u/s 194C. Further, on similar matters, the Tribunal has upheld the same reasoning that any such kind of charges a TDS are not liable to be deducted. Thus, the order of the CIT(A) is upheld and the grounds raised by the revenue are dismissed. - Decided in favour of assessee.
|