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M/s. ITT Shipping Pvt. Ltd. Versus Assistant Commissioner of Income-tax And Deputy Commissioner of Income-tax Versus M/s. ITT Shipping Pvt. Ltd.

2016 (11) TMI 529 - ITAT KOLKATA

Disallowance towards freight expenses u/s. 40(a)(ia) - CIT(A) had deleted all the disallowances only on the ground that the expenses were paid by the assessee before the end of the previous year - Held that:- Hon’ble Calcutta High Court in the case of CIT Vs. Crescent Exports Syndicate [2013 (5) TMI 510 - CALCUTTA HIGH COURT ] wherein it has been held that the provisions of section 40(a)(ia) of the Act would be applicable even if amounts were paid before the end of the previous year. - In re .....

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finding in his order as to how the subject mentioned expenditure would fall under the ambit of provisions of deduction of tax at source. Accordingly, we deem it fit and proper to set aside this issue to the file of the ld AO to give a clear finding in this regard in the light of the evidence submitted by the assessee with regard to the subjection mentioned expenditure. - In respect of payments made to Indian Register of Shipping we are convinced that the said party had given a certificate u/ .....

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eded in the aggregate of ₹ 50,000/- in respect of each party thereby warranting any deduction of tax at source in terms of section 194C of the Act. It is true that no such finding was given in the assessment order in this regard. Accordingly, we deem it fit and proper to set aside this issue to the file of AO to decide this issue afresh in accordance. - I.T.A No. 1951/Kol/2013, I.T.A No. 1908/Kol/2013 - Dated:- 6-10-2016 - Shri M. Balaganesh, AM And Shri S.S. Viswanethra Ravi, JM For the A .....

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pose of both the appeals by this consolidated order. 2. First we take up assessee s appeal. The only issue involved in this appeal of assessee is with regard to the disallowance of ₹ 14,93,044/- towards freight expenses by the AO u/s. 40(a)(ia) of the Act. 2.1. The AO observed that the assessee has paid freight expenses of ₹ 14,93,044/- without deduction of tax at source and accordingly disallowed the same u/s. 40(a)(ia) of the act. Before the Ld. CIT(A), the assessee produced all th .....

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on the following grounds: 1. For that the Assessment order u/s. 143(3) of the I. T. Act, 1961 is illegal and void. 2. For that the Freight Expenses of ₹ 14,93,044/- on which the assessee received the 15I from different parties. In this case, the TDS is not applicable. Therefore, as the assessee collected Form 15I from the different parties, it is not in default u/s. 201 of the Act. In case of other parties the amount was paid below the taxable limit. So, sec. 40(a)(ia) is not applicable he .....

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of the assessee as infructuous. 3. In revenue s appeal the only issue to be decided is as to whether the Ld. CIT(A) is justified in deleting the disallowance made u/s. 40(a)(ia) of the Act in respect of - (a) Payments made to Port Management Board - ₹ 17,29,970/- (b) Stevedoring charges - ₹ 5,08,277/- (c) Freight charges - ₹ 14,93,044/- (d) Payment made to Indian Registrar of Shipping - ₹ 3,52,726/- The AO observed that the aforesaid payments were made without deduction .....

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on the following grounds: 1. Ld. CIT(A)'s direction to allow deduction for the following payment is so far as made before the close of the accounting: (i) Disallowance u/s. 40(a)(ia) of ₹ 17,29,970/- on account of payment made to PMB. (ii) Disallowance u/s. 40(a)(ia) of Stevedoring Charges of ₹ 50,82,771/ - made to two parties (iii) Disallowance of Freight charges of ₹ 14,93,044/- (iv) Disallowance of ₹ 3,52,729/- on account of payment made to Indian Register of ship .....

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this, the Ld. AR argued that in respect of ₹ 17,29,970/- being payment made to Port Management Board, the same represents supply of fresh water to the ship for which payments were made which does not warrant deduction of tax at source in terms of section 194C of the Act. Hence, provisions of section 40(a)(ia) of the Act could not be invoked in the same, in support of which he placed copies of invoices for the same issued by Port Management Board, Anadaman & Nicobar Islands, Port Blair .....

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he Ld. DR also fairly conceded for setting aside of this issue to the file of the Ld. AO. In respect of payments made to Indian Register of Shipping in the sum of ₹ 3,52,726/-, the Ld. AR stated that the said party had furnished a certificate u/s. 197(1) of the Act dated 30.11.2007 which is valid upto 31.03.2008, wherein payments to them would have to be made without deduction of any tax at source. Accordingly, he argued that there is no need for the assessee to deduct any tax at source in .....

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ough facts and circumstances of the case. We find that the Ld. CIT(A) had deleted all the disallowances u/s. 40(a)(ia) of the Act only on the ground that the expenses were paid by the assessee before the end of the previous year. In this regard he had placed reliance on the Special bench Decision of Vizag Tribunal in the case of Merilyn Shipping & Transport Ltd., supra. However, we find that the issue has been held in favour of the revenue by the decision of Hon ble Calcutta High Court in th .....

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oes not fall under the ambit of deduction of tax at source under any of the provisions of the Act. Hence, disallowance made u/s. 40(a)(ia) of the Act to that effect is deleted. 3.5. In respect of payments made in the sum of ₹ 50,82,771/- towards stevedoring charges, we find that the ld AO had not given any finding in his order as to how the subject mentioned expenditure would fall under the ambit of provisions of deduction of tax at source. Accordingly, we deem it fit and proper to set asi .....

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