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2016 (6) TMI 634 - ITAT AMRITSARNon deduction of tds in respect of shipping expenses - assessee in default - whether Inland haulage charges, Terminal handling charges, Bunker adjustment factor, Cost adjustment factor, etc., i.e., shipping expenses paid by the assessee regarding exports using non-resident shipping call for TDS? - Held that:- In case of shipping of goods at a port in India , seven and a half percent of the carriage charges shall be deemed to be income accruing in India on account of such carriage; that unless and until the tax assessable u/s 172 is paid or arranged for and the Collector of Customs is satisfied to that effect, the ship shall not be granted port clearance; that the carriage charges, as and envisaged by section 172(2) shall be included in the amount of demurrage charge or handling charge or any other amount of similar nature. In this regard, as per CBDT Circular No.723 dated 19.09.1995 (APB 37-38), where payments are made to shipping agents of nonresident ship-owners or charterers for carriage of passengers, etc., shipped at a port in India, since the agent acted on behalf of the nonresident ship-owner or charterer, he steps into the shoes of the principal and, accordingly, the provisions of section 172 shall apply and those of sections 194C and 195 will not apply. - Decided in favour of assessee Non deduction of tax out of dividend by transfer of funds by the assessee to its sister concerns by way of loans and advances - Held that:- As in ‘MTAR Technologies (P) Ltd. vs. ACIT’ (2010 (4) TMI 871 - ITAT HYDERABAD ), it has been held that payment by a company to a nonshareholder does not require TDS under section 194 and in such a case, the company/assessee cannot be held to be in default u/s 201 of the Act so as to attract interest u/s 201(1A) thereof. While holding so, it was observed that u/s 150 of the Companies Act, every company is expected to maintain a register of shareholders, whereas a company is not obliged to maintain a register wherein details of such concerns, as to which provisions of section 2(22)(e) of the Act apply, may be kept; and that so, that when the payment is made to a non shareholder, it is impossible for the payer company to ascertain whether it will attract the provisions of section 2(22)(e) of the Act or not and it is, therefore, that the law does not expect the payer company to deduct TDS when payment is made to a non-shareholder; that this is the reason why the law expressly provides for TDS requirements only when payment is made to a non-shareholder; that payment to a shareholder would cover both normal dividend as well as deemed dividend; that otherwise also, the deemed dividend will be taxed in the hands of the shareholder and not in the hands of the non ITA shareholder payee; that therefore, section 194 of the Act is synchronized with the requirement under sections 150 and 206 of the Companies Act; and that accordingly, the provisions of section 194C of the Act are not applicable in the hands of the recipient, due to which, the provisions of sections 201(1) and 201(1A) of the Act cannot be applied - Decided in favour of assessee
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