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The Income Tax Officer, Ward 1, Alappuzha Versus Mr Alex Rockey

2017 (1) TMI 509 - ITAT COCHIN

Reopening of assessment - no tax was deducted on the warehousing charges paid by the assessee u/s 194I - reopening on reliance on audit objection - Held that:- The audit party has raised objection with regard to non deduction of tax on warehousing charges paid. The issue whether warehousing charges are liable for tax deduction at source u/s 194I, is purely a legal issue. Hence, the audit objection cannot be a ground for reopening of assessment, especially when in the course of original assessmen .....

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6.2016. The relevant assessment year is 2009-10. 2 The grounds raised read as follows: The order of the learned Commissioner of Income tax (Appeals), Kottayam in so far as the points stated below are concerned, is opposed to law on the facts and in the circumstances of the case. 2. The Ld. Commissioner of Income Tax (Appeals) has erred in allowing the appeal of the assessee by nullifying the assessment u/s 147 of the Act. 3. The re-assessment u/s 147 of the Act was completed by the Assessing Off .....

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of the above clarification, the warehousing charges paid by the assessee ought to have been subjected to deduction of tax at source uls 194-1 of the Act. 6. The issue is covered by clause ( c ) of para 8 of the CBOT Circular { / NO.2112015 dt. 10/1212015 and hence, the monetary limit for filing appeal I before the ITAT is not applicable to this case. For these and other grounds that may be advanced at the time of hearing, the order of the learned Commissioner of Income tax (Appeals) on the above .....

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9,716/- debited in the P&L account. The reassessment u/s 143(3) r.w.s 147 of the Act was completed by disallowing the warehousing charges by invoking provisions of section 40(a)(ia) of the Act; since no tax was deducted on the warehousing charges paid by the assessee. 4 Aggrieved by the reassessment order, the assessee preferred an appeal before the first appellate authority. Before the first appellate authority, the assessee contended that reopening of assessment is invalid and on merits, s .....

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ous decision not to make the disallowance, the reopening of assessment is only change of opinion . The CIT(A) in holding so, primarily relied on the judgment of the Hon ble Apex Court in the case of CIT vs Kelvinator of India Ltd (320 ITR 561)(SC) 5 Aggrieved, the revenue is in appeal before the Tribunal. The ld Sr DR Shri A Dhanaraj had filed a brief written submissions. It was submitted that the reopening is permissible even if the information is obtained after proper investigation from the ma .....

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136 ITR 679 (Del) ii) CIT vs PVS Beedies P Ltd 237 ITR 13 (SC) iii) CIT vs First leasing Co of India Ltd ( 241 ITR 248 (Mad) 5.1 The ld AR, on the other hand, reiterated the submissions made before the Income Tax Authorities and relied on the findings/conclusion of the first appellate authority. 6 I have heard the rival submissions and perused the material on record. During the course of original assessment proceedings, the Assessing Officer had issued an office letter dated 1.12.2011 calling fo .....

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see has filed his reply on 25.10.11 and stated that warehousing charges paid is not for the exercise of property rights and therefore, it was not rent and the provisions u/s 194I will not be applicable. The relevant portion of the reply submitted by the assessee to the Assessing Officer during the course of original assessment proceedings, reads as follows: Regarding your query as to the applicability of tax deduction u/s 194I may state that the section applies to Rent . Warehousing charges does .....

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f the warehouse keeper. Further, in some cases insurance is covered by the warehouse. Thus, it will be clear that the warehouse charges paid is not for the exercise of property rights and therefore is not rent. Hence tax is not deductible u/s 194I on warehousing charges. Therefore, there cannot be any disallowance u/s 40(a)(ia). 6.2 On considering of the assessee s reply, the Assessing Officer did not disallow the warehousing charges paid on account of non deduction of tax at source and complete .....

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