Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

The Assistant Commissioner of Income-tax Versus M/s. Premier Marine Foods

2016 (11) TMI 660 - ITAT COCHIN

TDS u/s 194C - amount paid as plant repairs - non deduction of tds - whether the payment made under the head plant repair represents reimbursement of expenses? - Held that:- In our view this agreement is based on the parties having regard to the actual expenses incurred. The processing charges paid is separately billed on which TDS has been deducted. Having regard to the fact that separate bills have been given and based on various Judicial Pronouncements cited by the Ld. AR and having regard to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eld that:- Nevertheless all the above payment relates to payment to statutory authorities, labourers and others, on behalf of the assessee and none of them accrued to the agent. In our view the above payment will also not be liable to TDS. The Assessing Officer has neither quantified nor clear of the exact charges paid to M/s. Al Mustafa Agencies. In the absence of any material on record, we uphold the view of the Ld. CIT(A) in this regard. - Vehicle loan hire charges - CIT(A) has held that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the receiver to the effect that they have included such receipts as part of their income. The verdict of Ld. CIT(A) on this score has also to be upheld. - Revenue appeal dismissed. - ITA No. 509/Coch/2015 - Dated:- 26-9-2016 - Shri B. P. Jain, AM And George George K., JM Revenue By : Shri Shantam Bose, CIT(DR) Assessee By : Shri R. Sreenivasan, FCA ORDER Per B. P. Jain, AM This appeal of the Revenue arises from the order of the Ld. CIT(A), Kottayam dated 27-08-2015 for the AY 2011-12. 2. Th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uatic (the processor) clearly states the works to be undertaken by the processor/contractor as Washing, Cleaning, Processing, Freezing, Packing and Storing and the payments made include storing charges, peeling charges repacking charges, labour charges etc. d. The name of work undertaken by the processor and the nature of payments made to them itself show that the assessee had to necessarily deduct tax at source u/s. 194C of the Act. e. The Ld. CIT(A) has erred in deleting the addition u/s. 40(a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oan paid by the assessee to M/s. Sundaram Finance and other private companies was separately debited in the profit and loss account and hence, tax was deductable at source on the interest paid. 2. The brief facts of the case are that by order dated 28/02/2014, the Additional Commissioner of Income Tax has completed the assessment of the assessee firm determining a total income of ₹ 4,16,47,383/- as against returned income of ₹ 35,20,460/-. Various additions have been made which have .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sing marine product for the assessee by virtue of an agreement. According to the Assessing Officer the assesses is having the contract for processing, freezing and storing the marine products for export by the firm, which are mentioned in the agreement. According to the Assessing Officer, one each of the bill raised by M/s. Geo Acquatic, item wise charges under various heads are mentioned. The Assessing Officer concluded that this is the nature of work and on this the assessee is liable to deduc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

represent the reimbursement of expenses and hence no tax was deductable at source. According to the revenue the agreement entered into by the assessee with M/s. Geo Acquatic (P) Ltd. (the principal) clearly states that work to be undertaken by the processor/contractor was freezing, processing, packing and storing and the payment includes peeling charges, repacking charges, labour charges etc. According to them the nature of work undertaken by the processor and the nature of payment made by them .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s not appreciated the fact that the payment made under the head clearing and forwarding are normally inclusive of commission, service charges paid to the agency. In this regard Circular No. 05/2002 of CBDT was relied upon which clarify that clearing and forwarding agents act as independent contractors and any payment made to them would be liable for deduction of tax at source. 7. Ground No. 2(g) relates to interest on vehicle loan paid by the assessee to M/s. Sundaram Finance and others which ar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ce the recipient firm is also assessed to tax and have included all the receipts in their income. According to the Assessing Officer, the case of the Hon ble Supreme Court (supra) cannot be applied in a case where addition is made u/s. 40(a)(ia) of the Act. 9. It was also submitted that sec. 40(a)(ia) of the Act has been amended from 01.04.2013 by which no addition should be made unless the assessee was deemed to be in default and the recipient having filed their return of income within the due .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Copy of the decision of the Hon ble Supreme Court and Hon ble Allahabad High Court of the same enterprise were filed. Copy of the decision of the Chennai Bench of ITAT in the case of Thekkathir Press Madras was also referred to. As the case law stands today by verdict of the Hon ble Supreme Court the disallowance is not warranted. Reliance was also placed on the Jurisdictional High Court in the case of Muthoot Fincorp Ltd. and Hon ble Delhi High Court in the case of DLF Commercial Projects. 11. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reimbursement. M/s. Geo Acquatic have also raised the bill, separately showing the processing charges and various expenses incurred by them. According to the authorized representative, reimbursement of expenses is not taxable in the hands of the recipient. This will only go to reduce their expenditure incurred under particular heads and in such cases there is no liability to deduct tax. The assessee has placed reliance on the decision of the ITAT Delhi Bench D in the case of ITO vs. Dr. Willmar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y following the decision of ITAT Delhi Bench D, and the decision of Hon ble Kerala High Court (supra), we hold that the payment made to M/s. Geo Acquatic, debited under the head plant repairs does not attract TDS liability. 13. Further the Ld. AR filed a second paper book showing copy of bills raised by M/s. Geo Acquatic Pvt. Ltd., Chandiroor. He stated that page 1 to 32 of the paper book relates to bills raised for processing charges on which TDS has been deducted. Page 33 to 116 relates to bil .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on of ITAT Delhi Bench D in the case of DLF Commercial Projects to this effect. Reference was also placed on the decision of the Hon ble Kerala High Court in the case of Muthoot Fincorp Ltd., Trivandrum, wherein the Hon. Jurisdictional High Court have given a direction to Assessing Officer to verify the nature of reimbursement of expenses in that case where separate bills have been raised. The ACIT, Cir(1) TVM by her order dated 11/08/2014 have given effect to the order of Hon. High Court wherei .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

x. According to the Ld. Counsel for the assessee M/s. Al Mustafa Agencies are engaged for filing of documents at customs, inspection by customs, labour charges, payment for trailer and other port payments. None of these expenditure are within the purview of TDS provisions. The Ld. CIT(A) held that it is a fact that Al Mustafa Agencies were carrying out various services to the assessee for the effective export and shipping of goods like filing documents with customs, payment of cess, payment for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es paid to Al Mustafa Agencies towards these services. In these circumstances and in the absence of material on record he has held that the disallowance of clearing and forwarding charges as he has done is not warranted. He has also considered the decision of Hon ble Delhi High Court. 15. Yet another point in revenue s appeal is on the deletion of addition made out of vehicle loan hire charges of ₹ 3,61,136/- without deduction of tax. This is mainly paid to M/s. Sundaram Finance. Here also .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e is regarding deletion of addition made under section 40(a)(ia) on reimbursement of expenses paid to M/s. Geo Acquatic (P) Ltd. In this case as pointed out by the Ld. AR separate bills have been raised for processing charges and reimbursement of expenses and the assessee has deducted on the portion of processing charges and not deducted tax on reimbursement of expenses. Reimbursement of expenses comprises of various items like storing charges, peeling charges, flake ice charges, utility of lab .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d. AR and having regard to the fact that the revenue has accepted this fact of separate bill is another case as directed by the Jurisdictional High Court. We are of the considered opinion that the assessee is not liable to deduct tax on reimbursement of expenses to the tune of ₹ 11407877 and accordingly, we uphold the decision of the Ld. CIT(A) in this regard. 17. With regard to the addition of cleaning and forwarding charges to Al Mustafa Agencies, the amount paid is in the nature of docu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version