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TMI Blog2014 (2) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... 34,55,352/- made by the A.O on a/c of violation of section 40(a)(ia) of the I.T. Act, 1961. 2 That the order of the CIT(A)-II, Ludhiana be set aside and that of the A.O. be restored." 3 Ground No. 1 - After hearing both the parties we find that during assessment proceedings the AO noticed that the assessee had made payments towards freight and cartage charges amounting to Rs. 36,70,608/-.. When the details were filed it was noticed that TDS has been deducted only from Jai Bhawani and TDS has not been deducted from other parties. According to the Assessing Officer the assessee was duty bound to deduct TDS from other parties u/s 194C of the Act. Therefore, a show cause notice was issued to the assessee that why provisions of section 40(a)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods must be belonging to Foreign Shipping Companies. M/s EMU Lines Pvt. Ltd. & Cross Link Cargo Management Pvt. Ltd. are service provides therefore acting as a agent for Foreign Shipping Companies. These companies cannot be Shipping Companies because of their means and available funds. For owing ships large amount of fund is needed. To establish the fact that the ship which is handling the goods belongs to Foreign Shipping Companies we are enclosing the copy of Bill of Lading (BL). The Bill of Lading is a receipt to consignor by the ship master making himself responsible for the safe delivery of goods. The bill of Lading is showing the name of carrier, the name of shippers (Exporters), the name of consignee and place of destination a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equested that kindly don't draw any adverse view on this subject matter as the same is squarely covered under CBDT Circular No. 723." 4 The Assessing Officer examined the circular No. 723 and observed that the circular would apply in cases where the payments were made to Non Resident Shipping Companies. or their Resident agents, therefore, the circular was not applicable. Accordingly he invoked provisions of section 40(a)(ia) and added a sum of Rs. 34,55,352/- to the income of the assessee. 5 On appeal the submissions made before the Assessing Officer were reiterated. The ld. CIT(A) after examining the submissions and found merit only in respect of payments for shipping bill and allowed relief to the extent of Rs. 29,68,618.75 and confirm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision of section 172 of the Act does not come into picture and assessee. However, the appellant's counsel contended that the Assessing Officer has failed to appreciate the facts of the case in the light of Circular No. 723 read with section 172. The Counsel of the assessee has given emphasis on the importance of the Bill of Lading which is the base document which clarifies the two major ingredients contained in section 172 of the Act. Bill of Lading clearly mentioned the name of the Carrier and the name of the port in India. The Ld. Counsel of the assessee has submitted in detail as to why section 194C should not be applied. 4.1 Keeping in view the above discussed position of the case and on the basis of facts available in the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and required the filing of the return within a maximum time of thirty days of form the date of departure of the ship. 3. The provisions of section 172 are to apply, notwithstanding anything contained in the other provisions of the Act. Therefore, I such cases the provisions of section 194 C and 195 relating to tax deduction at source are not applicable. The recovery of tax is to be regulated, for a voyage undertaken from any part in India by a ship, under the provisions of section 171." Above makes it clear why the provisions of section 194C are not applicable if the goods are dispatched through the Non Resident Shipping Companies or through their Resident Agents. Accordingly we find nothing wrong with the order of the ld. CIT(A) and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the Visakhapatnam Income Tax Appellate Tribunal dated 09.04.2012 reported in (2012) 136 ITD 23." 15 Both the parties were heard. 16 After considering the rival submissions we find that the decision of Special Bench in case of Merilyn Shipping & Transport Vs. Addl CIT, 136 ITD 23 (Visakhapatnam )(SB) has already been overuledl by Hon'ble Gauhati High Court in case of CIT V. Sikander Khan, ITA No. 905 of 2012 order dated 2.5.2013. Same view has been taken by Hon'ble Calcutta High Court in case of CIT V. Cresent Export Syndicate, ITA No. 20 of 2013. In view of all these judgments we dismiss this ground. 17 In the result, Cross-objections are rejected. 18 In the result, appeal of the Revenue and the Cross-objections of the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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