TMI Blog2017 (1) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned AO is bad in law and the learned CIT(A) erred in upholding the order of the learned AO. 2. The learned AO and learned CIT(A) erred in treating the expenditure of ₹ 2,69,332 to be in the matter of Royalty as defined under explanation 2 to section 9(1)(vi) of the Act. 3. The learned AO and CIT(A) erred in making disallowance of expenditure of ₹ 2,69,332 under section 40(a)(ia) of the Act for nondeduction of TDS under section 194J of the Act. 4. The learned CIT(A) passed the order in violation of principle of natural justice. 2. Brief facts of the case are as under : In this case, the return of income for the assessment year under consideration was filed on 31-10-2007, declaring a total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: 12. We have carefully considered the submissions and perused the records. First we deal with the issue on the ground that the provisions of section 40(a)(ia) are not attracted inasmuch as the entire freight expenditure is paid and nothing is payable as on 31-03-2007. The facts in this regard are undisputed. The assessee s plea is that the entire freight amount was paid and nothing is payable as on 31-03-2007, and that this is duly reflected by a perusal of the balance sheet/profit loss account where no amount is payable as on 31-03-2007. In this regard learned counsel of the assessee has placed reliance upon CIT vs. Vector Shipping Services (P) Ltd. 357 ITR 642 (All.). In the said case Hon ble Allahabad High Court has uphel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the decision of Hon ble Apex Court in the case of CIT vs. Vegetable Products Ltd. 188 ITR 192 has to be followed. In the said decision the Hon ble Apex Court has expounded that in case there are two views possible, the view in favour of the assessee should be followed. Accordingly in absence of any jurisdictional High Court decision, we respectfully follow the decision of Hon ble Allahabad High Court in the case of Vector Shipping Services (P) Ltd. as above. Accordingly since no amount of the freight was unpaid or was payable as on 31-03-2007 we hold that the provisions of section 40(a)(ia) are not attracted and in this view of the matter we are of the opinion that Revenue s appeal is liable to be dismissed. 9. Respectfully follo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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