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2016 (3) TMI 859 - ITAT AHMEDABAD

2016 (3) TMI 859 - ITAT AHMEDABAD - [2016] 46 ITR (Trib) 519 - Additions made u/s. 206C(6)/206C(7) - non collection of TCS on sale of DOC (de-oiled cake), maize husk and cotton waste nspite of the fact that those items were scrap as defined u/s 206(c) - Held that:- To elaborate, perusal of manufacturing process of DOC amply testifies that the entire manufacturing process is designed to obtain two main products which are usable as such, namely, oil and DOC. This DOC which is high in protein conte .....

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he scrap is either thrown out or sold at cheaper rate because it cannot be used as raw material for manufactured or different items. In the case of a by-product, it has its own market value and can be used as such. In view of above, we find that the CIT(A) was justified in holding that the Assessing Officer has erred in categorizing DOC as scrap within the meaning of Explanation to Section 206C.

Regarding the raw cotton being treated as scrap we find raw cotton is only a part of raw m .....

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nterference from our side, which is confirmed.

Regarding Maize Husk (Fiber)percentages of husk as a by-product is close to 10% and it is mainly used in poultry farm, animal food and pharma industries. Since maize husk fiber is itself subjected to various manufacturing stages and as enormous economic value, it is one product manufactured and cannot be considered as a waste or scrap within the manufacturing process. In view of the above, the CIT(A) was justified in holding that main hus .....

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or has been explained by the AO that how C&F was covered u/s. 194J of the Income-tax Act. Therefore, under the given facts and circumstances of the case, the CIT(A) was justified in holding that the action of Assessing Officer invoking provision u/s 194J in respect to port charges payment for all the assessment years as unsustainable in law. Therefore, the order of the CIT(A) in this regard does not require any interference from our side, which is confirmed. - ITA Nos. 1542 to 1545/Ahd/2013, CO .....

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e all the appeals filed by Revenue and cross-objections thereof filed by the assessee pertain to similar issue, so these are being disposed of by this common order for sake of convenience. 2. At the outset, ld. Authorized Representative for the assessee submitted that he is not pressing Cross-objections; hence, all the Cross-objections filed by the assessee are dismissed being not pressed. 3. Coming to the Revenue's appeals, for the facility of reference, we take the lead case as ITA No. 154 .....

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d cotton waste inspite of the fact that those items were scrap as defined u/s 206(c). 3. The Ld. CIT (A) has erred on facts and in law in holding that the above items were "by products and there by failed to appreciate that even by products like Molasses and bagasses have been held as scrap within the definition of scrap u/s 206(c) as the definition is of wider import to cover even by product within it's sphere. 4. The Ld. CIT(A) has erred on facts and in law in deleting the addition ma .....

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source of ₹ 1,56,24,221/- by applying provisions of section 194C of the I.T. Act instead of 194J of the I.T. Act on payments of "Port Charges" made to C&F Agents. 6. The Ld. CIT (A) has erred on facts and in law in overlooking the fact that the services of C&F Agents were highly professional services requiring specialized knowledge about Customs Act and other laws hence was falls within the parameter of section 194J. 7. The Ld. CIT(A) has erred on facts and in law in over .....

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order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above fact. 4. The brief facts of the case as culled out from the records are that the assessee-company is stated to be a manufacturer, dealing with agro waste products operating mainly in solvent extraction, edible oil refining, cotton spinning and manufacturer of maize, maize starch and derivatives. A survey u/s 133A was carried out in the head office of the assessee in Ahmedabad on 09.10.2011. It .....

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these scrap items took place. The break-up of sales made for the four Assessment Years and upto the date of survey is as under: (Rs. Crores) Unit Type of scrap Asst. Year 2009-10 2009-10 Asst. Year 2010-11 Asst.Year 2011-12 Asst, Year 2012-13 Total Bio Himmatnagar Maize Husk 8.05 11.24 7.47 2.13 28.89 Bio Uttaranchal Maize Husk 0.99 4.64 6.48 2.58 14.6 Cotspin Himmatnagar Cotton Waste 20.56 27.44 30.69 11.26 89.95 DOC All Units DOC 533.63 303.69 413.36 65.54 1316.22 Total 566.23 347.01 458.20 81 .....

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stand of the assessee has been that they are manufacturer and exporter dealing with agro based products. It was submitted that the manufacturing process with respect to solvent extraction and refinery division, cotton yarn division, bio-chemical division to emphasize a point that the DOC cotton waste and maize husk could not be considered as scrap within the meaning of Section 206C of the Income-tax Act. According to the assessee, the aforesaid items were useable as such for and hence same could .....

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, Cotton Seeds, etc. Insolvent extraction plant from seeds two precuts are generated namely crude oil and DOC, DOC is a product which is usable as such in the manufacturing of cattle feed, various types of edible precuts, etc. Crude oil also is further processed and refined, from which further two products are generated namely, refined oil and gums. From processing seeds approximately 82-84% of DOC and 16-18% of oil is generated. ii) Cotton Yarn Division: Under this division, company manufacture .....

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l is maize. In the maize processing plant, maize seeds are processed and the products viz. Maize starch, gluten, germs, fiber (husk) and maize oil are produced. Further, from starch, various value added derivatives are produced viz. liquid glucose, dextrose, maltose, etc. Packing material/gunny bags are scrap/waste or not? As per the provisions of the Act, meaning of the scrap as provided in Explanation (b) to Section 206C of the I.T.Act, packing material like gunny bags, tins, SS & Plastics .....

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rom manufacturing/mechanical working as required in the definition of scrap, the said fact and position of law is clarified by the Hon'ble ITAT, Ahmedabad in the case of Navin Fluorine International Ltd. Maize Husk (Fiber) is scrap/waste or not? In the maize processing plant, maize seeds are processed and the products viz. maize starch, gluten, germs, fiber (husk) and maize oil are produced. Further from starch various value added derivatives are produced viz. Liquid Glucose, dextrose, malto .....

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cotton is separated, which is usable as such. From such lower quality cotton, thick quality cotton yarn is manufacture or such cotton in sold out to the manufactures of cotton yarn. During the process, the lower quality cotton is separated at various processes, which are called as Dropping, Comber Noil and Flat & Hard sweeping cotton which are sold out as cotton and fetches good value of the raw material. In process, micro dust and invisible waste are generated, which are approximately 2% t .....

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yarn for some years by us also but as there was lesser demand in export, we are selling the lower count cotton, known as Dropping, Comber Noil and Flat & Hard sweeping cotton, which is spoken as cotton waste but it is a raw material i.e. lower count cotton only. Thus, lower count cotton is raw material i.e. Cotton itself and saleable at a very high price. The lower cold cotton is usable as raw material only, the same is sold out to manufactures or yarn/other cotton items, and it is not a scr .....

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ufactured and it is a saleable product and it is not a scrap or waste." 4.2 The Assessing Officer rejected the contention of the assessee primarily on the ground that the aforesaid items were of the nature of scrap and the assessee as well as its buyer was covered within the definition of seller and buyer respectively as provided in Section 206C of the Income-tax Act. The Assessing Officer rejected the contentions of the assessee vide para-8 of his order which is reproduced herein as under, .....

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ny is selling the above items, which it terms as solvable/manufactured product to actual users/manufacturers. Then, the company should have obtained declaration in Form 27C from the buyer and should have furnished the same within 7 days of the next month in the office of concerned CCIT/CIT(TDS) which is not the case here". 4.3. Thus, the basic dispute has arisen because of the fact that the Assessing Officer categorized DOC, raw cotton waste and maize husk as 'scrap' within the mean .....

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d TDS for 4 years are as under:- Item of safe Demand Amount (in crores) Sale of DOC TCS 13.17 Sale of raw cotton waste TCS 0.19 Safe of maize husk TCS 0.44 Port charges (levy of TDS on short deduction (2% charged by the assessee u/s. 194C 10% considered by the AO u/s. 194J) TDS 3.38 Interest on above Interest 5.73 Total 23.62 4.4 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of the assessee and having considered the same, the CIT(A) al .....

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at "by-products and thereby failed to appreciate that even by-products like molasses and bagasses have been held as scrap within the definition of scrap u/s 206(C) as the definition is of wider import to cover even by-product within it's sphere." He also submitted that the CIT(A) erred in holding that the addition made u/s 206C(6)/206C(7) by wrongly relying on the decision of ITAT in the case of Navin Fluorine International Ltd. vs. ACIT in ITA No.1213 & 1214/Ahd/2010, because .....

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, it was noticed by the Assessing Officer that the assessee-company was mainly engaged in extraction of solvent from soya seeds, mustard seeds, castor seeds, cotton seeds, etc. On processing of these seeds the assessee besides oil received de-oiled cake (DOC) which is mainly used as cattle feed. The assessee also has units at Himmatnagar and Uttaranchal which processes maize. The processing of maize besides starch generates liquid glucose, dextrose, sorbitol and other products including maize hu .....

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hich falls within the ambit of provision of section 206C of the Act. According to ld. Departmental Representative, the CIT(A) has decided the issue against the department by holding that by-products cannot be held as scrap and waste which is not factually or legally correct. For which he relied upon the proposition from the book of J.M. Jaina & Brothers titled as "TDS is not Tedious" by Sanjay Kumar Verma. The stand of the ld. Departmental Representative has been that on perusal of .....

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contention of the assessee that most of the sale of DOC was towards export sale and only a very small portion constituted a local sale, it is submitted by the Departmental Representative that no criteria has been provided in the section that if 90% of the so-called by-product is exported and 10% is traded locally then the so called by-product cannot be treated as scrap and waste as defined u/s 206C. If major portion is export, then that does not mean that the same cannot be scrap and waste, henc .....

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ed as scrap and waste by the Assessing Officer were certainly generated from manufacturing process of the agro products of the assessee. Hence on the contrary, the Department stands get support from this decision also as all the so called by products were generated from manufacturing process of the assessee. Further the CIT(A) relying on the case of Navin Fluorine International Ltd. (supra) observed that such scrap should not be definitely usable as such. According to the Departmental Representa .....

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e by-products generated from manufacturing process are not covered by above definition since same could be used as such by other consumers. He has further erred in holding that DOC is a by-product and it certainly cannot be categorized as scrap and waste having its own market value because he has failed to appreciate that even scrap and waste has also have its own market value and the same cannot be sold on no or nil value. Likewise, the observation of CIT(A) was also not correct that scrap is e .....

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garding decision of ITAT in the case of Navin Fluorine International Ltd. (supra), the ld. Departmental Representative submitted that nowhere such kind of observation was found in the order; therefore, the CIT(A) was wrong in his decision as he has not properly read or understood the judgment of the ITAT in the case of Navin Fluorine International Ltd. (supra) in its right perspective; therefore the decision of CIT(A) was not sustainable in the eyes of law. He also submitted that almost similar .....

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uot;6. The Tribunal, after considering the definition of scrap under clause (b) to section 206C of the Act, has noted that the assessee is engaged in ship breaking activity and the items in question are finished products obtained from the activity and constitute sizeable chunk of production done by ship breakers. Though such products may be commercially known as "scrap" they are not "waste and scrap", as such items are usable as such, and, therefore, do not fall within the de .....

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e, whichever is earlier, collect from the buyer of any goods of the nature specified in column (2) of the Table below, a sum equal to the percentage specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax. The nature of goods specified at serial No.(vi) is scrap, and the percentage provided is 1%. The expression of scrap is defined under clause (b) to the Explanation to section 206 of the Act, to mean waste and scrap from manufacture or mechanical worki .....

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as such and, therefore, do not fall within the definition of scrap. However, since the assessee had not collected tax at source on items other than items obtained out of the manufacturing activity in the course of ship breaking, the Tribunal has remitted the matter to the Assessing Officer for the purpose granting relief to the assessee under the provisions of section 206C (1) of the Act with regard to only sale of scrap arising out of manufacturing activity in the course of ship breaking after .....

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9. Insofar as the course of action adopted by the Tribunal in remitting the matter to the Assessing Officer to decide in relation to which of the items the assessee is entitled to relief under the provisions of section 206C(1) of the Act is concerned, no fault can be found in the approach adopted by the Tribunal, inasmuch as, out of the four items of which tax was not collected at source, the matter has merely been referred to the Assessing Officer for the purpose of examining as to what extent .....

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submitted that ratio in Priya Blue Industries Pvt Ltd supports the order of the CIT(A). 5. After going through the rival submissions and perusing the material on record, the remand report and the case laws as relied upon by the assessee, we find that the issue before us for adjudication is whether the DOC, cotton waste and maize husk is to be treated as 'scrap' or 'waste' within the meaning of definition provided in Section 206C of the IT Act. Section 206C reads as under:- " .....

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age, specified in the corresponding entry in column (3) of the said Table, of such amount as income-tax: TABLE Sl. No. Nature of goods Percentage (1) (2) (3) (i) Alcoholic Liquor for human consumption One per cent (ii) Tendu leaves Five per cent (iii) Timber obtained under a forest lease Two and one-half per cent (iv) Timber obtained by any mode other than under a forest lease Two and one-half per cent (v) Any other forest produce not being timber or tendu leaves Two and one-half per cent (vi) S .....

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Government, and an embassy, a High Commission, legation, commission, consulate and the trade representation, of a foreign State and a club; or (B) a buyer in the retail sale of such goods purchased by him for personal consumption; (ii) sub-section (1D) means a person who obtains in any sale, goods of the nature specified in the said sub-section; (ab) "jewellery" shall have the meaning assigned to it in the Explanation to sub-clause (ii) of clause (14) of section 2; (b) "scrap" .....

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or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which the goods of the nature specified in the Table in sub-section (1) or sub-section (1D) are sold. 5.1 With respect to 'scrap' as in section 206C, the Hon'ble ITAT, Ahmedabad happens to clarify the definition of scrap in the case of Navin Fluorine International Ltd. Vs .....

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tood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effec .....

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y following the above decision, the Hon'ble High Court held as under : "It is now a well-settled principle of law that a literal meaning should be attributed to a statute. The golden rule of interpretation should ordinarily be adhered to." 11. The ordinary meaning of scrap and waste as have been provided in Oxford English Dictionary provides : (a) Scrap-small piece or amount of something especially one that is leftover after greater part has been used-material discarded for reproce .....

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sable as such because of breakage, cutting up, wear and other reasons. In the above definition the important words used in the definition of scrap are "waste and scrap"-"from manufacture" and "which is". The word "waste and scrap" are one item. Thereafter, the word used is "from" the manufacture or mechanical working of material. It would mean that the waste and scrap being one item should arise from the manufacture or mechanical working of mater .....

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and thus the singular item would be waste and scrap. The words waste and scrap thus cannot be read differently as is argued by the learned Departmental Representative. The list of scrap sold by the assessee is reproduced above which are not connected with manufacture or mechanical working of material. The findings of the learned CIT(A) are based on presumption only that since the assessee is engaged in manufacture of fluorine and other refrigerant gases, therefore, entire scrap is generated out .....

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of the material for the gases. The items of the scrap in the case of the assessee would not form part of the definition of the scrap as is provided in Expln. (b) to s. 206C of the IT Act. Thus, the Explanation is wrongly applied in the case of the assessee. 5.2 According to this judgement, the ITAT-Ahmedabad has held that waste and scrap are one item and it is necessary to read waste and scrap together. It is further pointed by the Tribunal that waste and scrap is a singular item, same arise ou .....

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tilizer". Further, in an order by the Government of India namely "The solvent extracted oil, De-oiled Meal and edible Flour (Control) order of 1967' defines De-oiled Meal (another nomenclature of DOC) as " De-oiled Meal means the residue material left over when oil is extracted by a solvent front any oil bearing material. The plain reading of the definition above indicates that it is a residue material having enormous economic value due to presence of proteins even upto an ext .....

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ap which arises from manufacturing or mechanical working of materials. Further, such scrap should not be definitely usable as such. Accordingly, it would not include in waste or scrap which either does not arise or manufacturing or mechanical working of materials which is usable as such. As a corollary, the by-products generated from manufacturing process are not covered in above definition since same could be as such by other consumers. To elaborate, perusal of manufacturing process of DOC ampl .....

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ent countries. All the aforesaid facts indicate that DOC is a by-product and it certainly cannot be categorized as scrap and waste and it has its own market value. Generally, the scrap is either thrown out or sold at cheaper rate because it cannot be used as raw material for manufactured or different items. In the case of a by-product, it has its own market value and can be used as such. In view of above, we find that the CIT(A) was justified in holding that the Assessing Officer has erred in ca .....

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ial is Raw Cotton. In Cotton Yarn division raw cotton is processed and cotton yarn is generated, which is also largely exported. In that process the lower quality of cotton is separated, which is usable as such. From such lower quality cotton thick qualify cotton yarn is manufactured or such cotton is sold out to the manufacturers of cotton yarn. During the process the lower quality cotton is separated at various processes, which are called as Dropping, Comber Noil, and Flat & Hard sweeping .....

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re the first task is to segregate the cotton of acceptable quality from the raw material so that it goes into manufacturing process for the production of cotton yarn. It was pointed out that the cotton is a natural product and lower count cotton is separated in all the processes, namely, carding, lapping, comber, sweeping, etc. This process, as pointed out earlier, segregate cotton into acceptable raw material for its manufacturing process. The other raw material is then sold off as cotton only .....

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uring for the production of cotton yarn, is sold off as raw cotton. The percentage of so called 'cotton waste' as a result of this segregation was as high as 41% and constitute substantial sale as was pointed out by the assessee. The ratio of raw cotton sale against the cotton purchase under various yields is tabulated as under: Fin. Year Cotton Purchase Cotton Waste Sales %of Cotton Waste Sales Qty(MT) Amount (Rs.) Qty (MT) Amount (Rs) 2008-09 15805.291 1055687632 5005.368 205652575 31. .....

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other yarn manufacturers including that for export. So, the CIT(A) was justified in holding that such raw cotton does not arise from manufacturing or mechanical working as it is merely a segregation of raw material as was pointed out by the assessee. Therefore, these reasoned finding of the CIT(A) need no interference from our side, which is confirmed. 5.4 Regarding Maize Husk (Fiber), the stand of the assessee has been that it is a by-product and is sold off commercially. The manufacturing pro .....

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e maize husk fiber is itself subjected to various manufacturing stages and as enormous economic value, it is one product manufactured and cannot be considered as a waste or scrap within the manufacturing process. In view of the above, the CIT(A) was justified in holding that main husk is a by-product and the same cannot be considered as scrap and waste as provided in the Explanation to Section 206C of the Income-tax Act. 6. Next issue is with regard to the deduction of tax at source on payment o .....

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der:- "Port charges and applicability of Sec 194C/194J In this regard, we would like to inform to your good self that we appointed C&F agents at various ports from where we are exporting/importing goods from & to India. Before entering into business with these agents, appellant Company entered into an agreement with these agents which comprises of following factors:- a) Receiving the goods from the factories or premises of the principal or his agents; b) Arranging of Labourer for do .....

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l with Custom Authorities. i) Payment of warfare, demurrage, port charges, etc on behalf of principal as and when require. j) Any other activity which is require to do in clearance of exporting/importing of documents, goods etc on behalf of principal. It is submitted that as per the sec 194C of the Act, meaning of the "contract" "Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including .....

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with replies: Question 6: Whether payment under of contract for carriage of goods or passengers by any mode of transport would include payment made to a travel agent for purchase of a ticket or payment made to a clearing and forwarding agent for carriage of goods? Answer: The provision of section 194C shall, however, apply when a plane or a bus or any other mode of transport is chartered by one of the entities mentioned in section 194C of the Act As regards payments made to clearing and forwardi .....

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s. The position of clearing and forwarding agents is different. They act as independent contractors. Any payment made to them would, hence, be liable for deduction of tax at source. They would also be liable to deduct tax at source while making payments to a carrier of goods. "The above definition of contract u/s. 194C and circular it is dear that the clearing and forwarding agents are contractors and not professionals as stated by your good self, it is further submitted that the C&F Ag .....

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of CHA parties for reference in Annexure (1-17) vide letter dated 14-11-2011 interalia, stating we once again submit that Clearing and Forwarding Agents are contractors and not professions. Their status also is defined as independent contractors and thus payments to them attract TDS as per the provisions of Section 194(C) of the Act" 6.1 The Assessing Officer rejected the contention of the assessee by observing that the assessee has taken a very narrow meaning of the term 'professional .....

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s to the custom authorities. The Assessing Officer concluded that since services rendered by C& F agents include preparation and submission of documents to custom authorities for getting import and export clearance, it is clearly the services in the nature of professional services. According to the Assessing Officer, on such services squarely fall within the ambit of provisions of Section 194J being the professional services, TDS @ 10% should have been deducted. With respect to Circular No. .....

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ions were raised on behalf of the assessee. The ld. Authorized Representative for the assessee before the CIT(A) pointed out the recent decision of ITAT-Delhi Bench in the case of Glaxo Smithkline Consumer Health Care Pvt. Ltd. Vs ITO, 12 SOT 221 (Delhi) wherein it was held that payment to C&F agents in pursuant to agreement entered with them would attract TDS u/s. 194C and not 194J. The relevant portion of the decision is reproduced below:- "Section 194C, read with section 194J of the .....

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agent to assessee were in nature of managerial services and, therefore, tax should have been deducted on such payment under section 194J - Whether since payment made by assessee to agent was for services relating to storage, dispatch, transportation, loading and unloading of goods etc., assessee had rightly deducted tax at source under Section 194CHeld, yes, - Whether, therefore, lower authorities were not justified for treating services rendered to assessee as falling under section 194J- Held, .....

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nd the same was not for any professional or technical services as mentioned under section 194J. [Para 6) It is crystal dear from the provisions of section 194J that services of the agents are neither professional services, nor technical services. Such services are also clearly not in the nature of technical, consultancy or managerial services. Therefore, tax in respect of these services is not to be deductible under section 194J. The CBDT, in its Circular No. 720 dated 30-8-1995, had also provid .....

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s to the agent was for the services, which was predominantly for 'carrying out work' inter alia, relating to storage, dispatch, transportation, loading and unloading of goods, etc., the assesses had rightly deducted tax at source under section 194C. [Para 7]" 6.3 In this background, the CIT(A), having considered the aforesaid submissions of the assessee, allowed the claim of the assessee as claimed and the same has been opposed before us on behalf of the Revenue, inter alia, submitt .....

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tions and perused the material on record. The issue before us is whether the provisions of Section 194C or 194J to be made applicable for the payment made to C&F Agents? Out of the total port charges for any given assessment year; most of the port charges are paid directly to various services provided like fumigator, shipping line agent, transporter, etc. With respect to payment to C&F agents, the assessee has given complete details for breakup of payments made to C&F agents before t .....

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under:- Vendor Name Nature of Service Total Amount TPS Amount PESTALERT CHEMICALS PVT LTD FUMIGATOR 571,117 12940 CONTAINER MOVEMENT (BOM) TRANSPORT SHIPPING LINE AGENT 22,390 516 MARINE CONTAINER SERVICES (I) P LTD SHIPPING LINE AGENT 56,497 1,280 DIGRANI SHIPPING S LOGISTICS TRANSPORTER 701,498 15,898 KOTAK GLOBAL. LOGISTICS LTD TRANSPORTER 16,533,328 76,831 SEATRANS LOGISTICS TRANSPORTER 2,885,168 65,380 S ANAND CARGO MOVERS TRANSPORTER 96,857 2,194 ASHAPURA FORWARDERS PVT LTD C& F AGENT .....

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ORWARDERS PVT LTD C&F AGEN 29,526,122 371,075 THE SHIPPING CORPORATION OF INDIA LTD SHIPPING LINE AGENT 2,609,273 59,125 PANLLOYD LOGISTICS PVT LTD TRANSPORTER 230,379 5,221 LILADHAR PASOO FORWARDERS P LTD C&F AGENT 3,890,628 88,126 ALMIGHTY INTERNATIONAL LOGISTICS TRANSPORTER 450,477 10,208 INOIAL SHIPPING PVT LD SHIPPING LINE AGENT 223,250 5,058 POSEIDON SHIPPING AGENCY PVT LTD SHIPPING LIME AGENT 29,117 659 WSA SHIPPING SOMQAV PVT LTD SHIP PING LINE AGENT 6,252 142 SEAWAYS SHIPPING AN .....

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ERS P LTD 3,105,067 785,561 3,890,628 TOTAL 38,621,314 6,397,095 45,018,409 6.5 From the aforesaid table, it is clear that for AY 2009-10 the assessee has made payments four C&F agents as is evident from the tabular sheet. The payment made to one of the C&F agents, namely, S, Ramdas Pragji Forwarders Pvt. Ltd, the assessee has made a total payment of ₹ 2,95,26,122/- which consists of ₹ 2,84,76,689/- being the expenditure which are directly reimbursed by the assessee and the a .....

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t it was covered u/s. 194C is duly supported by the CBDT Circular No. 715 which categorically clarifies that C&F agents were in the nature of independent contractors and the same is evident from question/answer No. 7 of this Circular. The coverage of C & F agents u/s. 194C is also reinforced by the judgement given by the Tribunal in the case of Glaxo Smithcline Consumer Health Care Pvt Ltd. (supra). Further, the AO's contention that C&F agents are covered u/s 194K as they are inc .....

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