TMI Blog2005 (10) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred: (i) in holding that the payment of ocean freight was not liable for TDS under s. 194C of the IT Act, in view of provisions of s. 172 of the Act in spite of the fact that the assessee despite sufficient opportunity failed to prove that payments of freight were made to non-resident shipping companies or their agents so as to be covered under s. 172 of the Act; and (ii) in holding that inland haulage charges are covered under sub-s. (8) of s. 172 of the Act and ignoring the fact that charges for inland transportation or handling charges or any other amount of similar nature. 3. The relevant and material facts for the disposal of the issue involved in the above stated grounds of appeal are that the assessee, M/s Freight Systems (India) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther according to the assessee Circular No. 723, dt. 19th Sept., 1995 has put the agents of foreign shipping line into their shoes for the purpose of deduction of TDS on ocean freight, etc. The assessee-company has submitted confirmations from sub-agents for being agents of the respective shipping lines. The assessee further contended that the demurrage/handling charges are not at all charges for carriage of goods by ship but paid for services rendered locally by the port trusts for storage of goods and handling of such goods by agents and sub-agents involved in the assistance of the carriage and any other amount paid for putting the goods on ship. These are all services rendered locally and not payments for carriage of goods by ship. Simi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of tax at source under s. 194C is not justified and the learned ITO has erred in doing the same. 6. On considering the submissions, the CIT(A) while passing a detailed order and reversing the order of the AO held that the assessee could not be treated as an assessee in default and hence cancelled the order of the AO. 7. Before us, the learned Departmental Representative for the Revenue, placed reliance on the reasoning given in the order of the AO, but was not able to controvert the factual observations made in the order of the CIT(A). 8. On the other hand, the learned Authorized Representative for the assessee, reiterating the submissions made before the CIT(A) submitted before us that the CIT(A) in a well-reasoned order has rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w distinction on the basis of the status of the agents. We would like to mention that even if the agent is to be treated as resident, by virtue of his acting on behalf of non-resident shippers or charters, he receives payments primarily on behalf of his principal, i.e., non-resident ship owners or ships charters shipped at a port in India. In our opinion, even if these amounts are inclusive of small element of the amounts that ultimately may be going into his own pocket or any of resident on account of demurrage or handling charge or any amount of similar nature, it will be covered by sub-s. (8) of s. 172 inasmuch as the circular does not draw any distinction between a dry port and a sea port. Thus, as per provisions of s. 172(8) the inland ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
