TMI Blog2011 (9) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2005-06. The ld. CIT (A) confirmed the action of the AO. 5. After considering the submissions and perusing the material on record, we find that assessee deserves to succeed in this ground. We noted that AO drawn adverse inference against assessee that M/s. C.P. Associates has not shown entries in its books in respect of transaction entered with the assessee during the assessment year 2005-06 and held that receipt of ₹ 4,70,072/- pertained to the year 2004-05 and accordingly the addition was made in the year under consideration. We further noted that assessee had supplied material of ₹ 49,07,504/- to M/s. C.P. Associates and had received full payment against the supplies which included supply of material worth ₹ 4,70,072/-. In view of provisions of section 44AF, assessee has shown profit on the sales made to this party. If by any reason, the purchasing party has not shown the purchases in their account, no adverse inference can be drawn against the assessee by merely observing that other party has not shown the purchases. The assessee has furnished the confirmed copy of account of M/s. C.P. Associates and has also requested to summon the party for resolving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rge his onus. The AO has also mentioned that assessee has filed original affidavit of the creditor. However, in view of the AO, the assessee could not explain the credits properly. It was submitted before ld. CIT (A) that confirmation along with their affidavits were filed before the AO and request was made to issue summon under section 131. However, AO has not pursued the matter further. Therefore, he was not justified in deciding the issue against the assessee. However, the ld. CIT (A) was also not satisfied with the reply. Accordingly, he confirmed the action of the AO. 10. After considering the submissions and perusing the material on record including decision of Hon ble Jurisdictional High Court in case of M/s. Aravali Trading Co., 187 Taxman 338 and also the decision of Hon ble Supreme Court in case of Orissa Corporation Pvt. Ltd., 159 ITR 78 (SC) wherein it is held that when the assessee furnishes names and addresses of the alleged creditors, the burden shifts to the department to establish the Revenue s case and in order to sustain the addition the revenue has to pursue the inquiry and to establish the lack of creditworthiness and there mere issue of notice under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia were available on record as copy of ledger account, bank payment advice, statement of commission due received from the party outside India, copy of passport of party and visa in respect of NRI status and copy of Circular No. 786 dated 7.2.2000 are placed on record. Therefore, in our view, no TDS was liable to be deducted on this amount. Similar issue came up before the Jaipur Bench in case of M/s. Modern Insulator Ltd. decided in ITA No. 281/JP/2010 dated 13.4.2011 wherein on similar facts it was held that assessee is not liable to deduct tax on the services rendered outside India. Respectfully following the decision of same bench and in view of rule of consistency, we hold that addition made and sustained of ₹ 5,26,070/- was not justified. Accordingly, the same is deleted. 15. Remaining addition of ₹ 15,30,589 was made by the AO again treating the Shipping Charges as Commission paid by the assessee. It was submitted before ld. CIT (A) that AO arbitrarily and by quoting mis-leading details intentionally made addition of lump sum amount of ₹ 15,30,589/- by saying that auditors of the firm in his report in Form 3CD has mentioned that Assessee has not deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 172 is a self-contained code for the levy and recovery of the tax, ship-wise and journey-wise, and requires the filing of the return within a maximum time of thirty days from 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, in such cases, the provisions of sections 194C 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 port in India by a ship, under the provisions of section 172. 4. Section 194C deals with works contracts including carriage of goods and passengers by any mode of transport other than the Railways. This section applies to payments made by a person referred to in clauses (a) to (f) of sub section (1) to any resident (termed as contractor). It is clear from the section that the area of operation of TDS is confined to payments made to any resident . On the other hand, section 172 operates in the area of computation of profits from shipping business of non-residents. Thus, there is no overlapping in the areas of operation of these sections. 5. There would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to ₹ 10,000/- against the addition made of ₹ 32,280/-. 21. The appeal for assessment year 2007-08 is filed by late by three days. It was informed by ld. A/R that on the last day the appeal could not be filed as certain legal formalities remained to be done and on the next two days there being holidays on account of Saturday and Sunday, the appeal could be filed on Monday. Therefore, the ld. A/R requested to condone the delay of three days. In view of the above explanation, we condone the delay in filing the appeal late by three days. 22. In assessment for assessment year 2007-08, ground no. 1 is against confirming the addition made under section 40(a)(ia) at ₹ 9,84,328/-. 23. This addition includes Shipping Commission of ₹ 36,927/-, Commission to NRI ₹ 2,88,746/- and Shipping charges at ₹ 6,58,655/-. Identical issue was raised in assessment year 2005-06 where we have deleted the entire addition. On the same reasoning this ground of the assessee is allowed for the year under consideration also. 24. Ground No. 2 is against upholding an addition of ₹ 21,290/-. 25. In this year the assessee has shown household withdrawal S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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