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2015 (9) TMI 808 - GUJARAT HIGH COURT

2015 (9) TMI 808 - GUJARAT HIGH COURT - TMI - Disallowance u/s 40(a)(ia) - assessee has failed to bring any evidence of record that the payments made are covered under Circular No.723 of 1995 and that the non-residents ship owners/charters had filed returns u/s 172 of the Act - ITAT confirmed CIT(A) order deleleting part disallowance - Held that:- From the findings recorded by the Commissioner (Appeals), it is evident that he has thoroughly examined the facts of the case and has based his conclu .....

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terial has been ignored. Under the circumstances, the conclusions arrived at by the Tribunal being based upon concurrent findings of fact recorded by it, in the absence of any perversity therein, do not give rise to any question of law much less, a substantial question of law as proposed or otherwise. The appeal is, therefore, dismissed. - Decided against revenue. - Tax Appeal No. 569 of 2015 - Dated:- 8-9-2015 - Harsha Devani And A. G. Uraizee, JJ. For the Petitioner : Mr MR Bhatt, Sr Adv. with .....

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substantial question of law:- "Whether the Appellate Tribunal has substantially erred in law in upholding the decision of the CIT(A) in deleting the disallowance of ₹ 12685501/- out of total disallowance of ₹ 1,55,67,666/- made u/s 40(a)(ia) of the Act, especially when the assessee has failed to bring any evidence of record that the payments made are covered under Circular No.723 of 1995 and that the non-residents ship owners/charters had filed returns u/s 172 of the Act?" .....

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and partly allowed the assessee's appeal. Being aggrieved by the dismissal of its appeal, revenue has preferred the present appeal. 3. Mr. M.R. Bhatt, senior advocate, learned counsel for the appellant assailed the impugned order by reiterating the findings recorded by the Assessing Officer. 4. This court has considered the submissions advanced by the learned counsel for the appellant and has perused the impugned order passed by the Tribunal as well as the orders passed by the lower authorit .....

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all the payments. Appellant strongly relied upon the CBDT circular number 723 as per which any payment of ocean freight to foreign shipping lines or Indian agent of foreign shipping lines is not subject to TDS under section 194C or section 195 since these are subject to section 172 of IT act. Appellant also relied upon several decisions in which payment to agents of non-resident shipping companies were held to be not subject to TDS provisions. Therefore it is clear that wherever any person makes .....

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r section 194C will be there. Non-deduction of TDS in these cases will result in disallowance. 2 - Any payment to non-resident shipping company will not require deduction of tax. Therefore Non-deduction of tax will not result in any disallowance. 3 - payment to Indian agent of non-resident shipping company will also not require deduction of tax at source and accordingly non-deduction will not result in any disallowance. The assessing officer, in the remand proceeding did not examine the issue fr .....

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that except in three cases discussed later, all the payments were made to the agents of non-resident shipping companies. While signing the bill of lading, it is clearly mentioned that Indian company signed the same as an agent for and on behalf of non-resident shipping company. Therefore as per circular 723 and the decisions relied upon by the appellant, there was no requirement of deducing TDS under section 194C. Since TDS was not required to be deducted, there is no question of disallowance un .....

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shipping companies in capacity as principal shipping lines and not as agent of non-resident shipping company. This is very clear from the bill of lading signed by these companies. Accordingly any payment to these companies required deduction of TDS under section 194C since circular number 723 and the decisions relied upon by the appellant are not applicable. However in the case of shipping Corporation of India Ltd, appellant submitted no deduction certificate issued by DCIT. TDS by order dated .....

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