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2005 (10) TMI 229 - AT - Income TaxLiability for tax deduct u/s 194C - Ocean freight - inland haulage charges - Whether Payments of freight were made to non-resident shipping companies or their agents so as to be covered u/s. 172 - HELD THAT:- The CBDT Circular No. 723 has made it further clear that where payments are made to shipping agents of non-resident ship owners or charter ship at a port in India, provisions of s. 172 will apply because the agent steps into the shoes of the principal. However, the problem arises only when restrictive interpretation is placed on the Board's circular referred to hereinabove when the AO has sought to draw distinction on the basis of the status of the agents. Thus, as per provisions of s. 172(8) the inland haulage charges are also covered under this provision of law and, hence, no deduction of tax is called under s. 194C of the Act. We are further of the opinion that such an interpretation is also fair because the dry ports or ICDs are treated at par with the regular ports. Hence, the contradictory stand taken by the AO, i.e., when he included certain charges in freight in respect of movement of goods by road at the destination contrary by the shipping line such charges are deemed to be covered u/s 172, but when the same shipping line or their agents take charges for transportation from ICD, where goods have been handed over to them by an exporter, then these amounts are not deemed to be covered u/s 172. Thus, in our opinion, the assessee cannot be treated as an assessee in default, so, the CIT(A) after properly considering the submissions of the assessee and properly analyzing the provisions of law, has rightly cancelled the impugned orders of the AO by passing a well-reasoned and well-discussed consolidated order. Accordingly, the impugned order of the CIT(A) is upheld and the grounds of appeal taken by the Revenue in the respective appeals under consideration before us are rejected. In the result, the four instant appeals filed by the Revenue, against the consolidated order of the CIT(A), are dismissed.
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