9911796707
TMI Blog2013 (4) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. On the facts and in the circumstances of the case and in law the Learned CIT(A) has erred in deleting the disallowance of Rs. 50,91,541/- made by the AO u/s 40(a)(ia) on account of non-deduction of TDS on air freight paid to foreign airline companies, ignoring the fact that :- (a) the foreign airline's income is deemed to be table in India at a prescribed rate and unless specifically exempted from the TDS provisions by the AO through an order u/s 195(2) and no such order u/s 195(2) has been produced before the A.O. (b) the CBDT's circular No. 723 dated 19.09.1995, which covers only shipping company and not an Airline Company. (c) the assessee has not paid freight directly to Airlines but to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee had not made any payments on account of freight charges directly to the airlines. The AO, therefore, was of the view that there was failure on the part of the assessee to deduct tax at source from the payment of freight charges and required the assessee to show cause as to why such freight charges should not be disallowed u/s 40(a)(ia) for its failure to deduct tax at source from the payments thereof. In reply, the following submissions were made on behalf of the assessee before the AO : "(2) We have already submitted to your office the details of freight charges paid. In this connection, we have to submit that out of the list only 7 parties are such where payment in excess of Rs. 50,000/- during the year is made. We have to state t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not directly made by the assessee to airlines but the same was made to different parties who acted as freight booking agent. He also noted that the said parties had also not furnished any certificate issued u/s 197 for no deduction of tax at source. Accordingly the freight charges paid to the said parties for air fare/road transport amounting to Rs. 50,91,206/- was disallowed by the AO u/s 40(a)(ia) in the assessment completed u/s 143(3) vide an order dated 23-12-2008. 5. Against the order passed by the AO u/s 143(3), an appeal was filed by the assessee before the learned CIT(Appeals) and after considering the submissions made by the assessee as well as the details and documents furnished by the assessee, the learned CIT(Appeals) delet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Air Way Bill Gulf Air Company G.S.C. Bahrain Exempt under Article 8 of DTAA 2 City Transport Syndicate Pvt. Ltd. 549,834.00 Shipping Bill City Transport Syndicate Pvt. Ltd. Doha/Qatar Exempt Under Circular Shipping Bill PEE Express Ltd. London UK Exempt Under Circular. 3 Aroscan Cargo Trade Pvt. Ltd. 497,840.00 Air Way Bill Gulf Air Company G.S.C. Bahrain Exempt under Articles 8 of DTAA. Air Way Bill Singapore Airlines Cargo Singapore Exempt under Articles 8 of DTAA. Air Way Bill Airways U.A.E. Exempt under Articles 8 of DTAA 4 DHL Express (I) Pvt. Ltd. 63,09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts were held to be exempt by the learned CIT(Appeals) relying on Article 8 of the Double Tax Avoidance Treaty as well as in some cases relying on the CBDT Circular. He, however, has not given any reason or basis to show as to how the said payments were exempt either under the relevant tax treaties or under the Board's circular. No opportunity was also given by him to the AO to examine the various details and documents filed by the assessee for the first time before him before giving relief to the assessee relying on the said details and documents. As rightly submitted by the learned DR, the payments were made to different parties from different countries and the applicability of Article 8 in case of each party was required to be examine ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
