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M/s. Ahlers India Pvt Ltd. Versus The DCIT, Chennai

2017 (3) TMI 477 - ITAT CHENNAI

Disallowance u/s.40(a)(i) - payments to various resident parties - non deduction of tds - retrospectivity - Held that:- As held in the case of CIT Vs. Ansal Land Mark Township (P) Ltd. (2015 (9) TMI 79 - DELHI HIGH COURT ) the insertion of the second proviso to section 40(a)(ia) was inserted by the Finance Act, 2012 with effect from 1st April 2013 wherein the assessee failed to deduct tax in accordance with the provisions of Chapter-XVII B as long as the payee or resident has filed its return of .....

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e file of AO to examine the applicability of the said proviso to Sec.40(a)(i) of the Act and decide accordingly. Therefore, the issue is remitted to the file of AO for fresh consideration. This Ground is partly allowed. - Payments made to agents of non-resident ship owners/charters - Disallowance u/s.40(a)(i) - Held that:- In this case Sec.172 only applies and there is no necessity of deduction on the above payments as it is not a “Royalty”. In our opinion, the applicability of Sec.172 to b .....

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ability - Held that:- Comparable as engaged in cargo handling, logistics and freights, segmental wise details are available for comparing with the assessee company are acceptable. - I.T.A. No. 1071/Mds./2016 - Dated:- 3-3-2017 - Shri Chandra Poojari, Accountant Member And Shri Duvvuru RL Reddy, Judicial Member Appellant by : Mr.Vikram Vijayaraghavan, Advocate Respondent by : Mr.Pathlavath Peerya, CIT D.R ORDER Per Chandra Poojari, Accountant Member This appeal of the assessee is directed against .....

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e same was disallowed by the AO by invoking the provisions of the section 40(a)(i) of the Act. At the time of hearing, it was submitted before us that in view of provisions of the section 40(a)(i) of the Act where the recipient of above payments have included the same as income in their return of income and discharged their obligation by duly filing the return of income for relevant to assessment year, the disallowance cannot be made in the hands of assessee. 3.1 We find force in the argument of .....

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embedded and has also paid tax on such income, the assessee would not be treated as a person in default. Hence, in our opinion, if the recipient of the payment has disclosed the impugned receipt as their income, then the assessee cannot be considered as the assessee in default in terms of sec.201(1) of the Act so as to invoke the provisions of the section 40(a)(i) of the Act. Accordingly, we remit this issue to the file of AO to examine the applicability of the said proviso to Sec.40(a)(i) of t .....

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iance on CBDT Circular No.723 dated 19.09.1995. According to him, the ratio laid down in the case of Poompuhar Shipping Corpn. Vs. ITO in 360 ITR 257 (Mad.)cannot be applied. The assessee is merely provides cargo handling and freight forwarding services as evidenced by its declaration in Form 3 CD as Service Sector and further the nature of payments, the quantum of such payments made as number of payments made throughout the year by the assessee to foreign ship owners and agents clearly show tha .....

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opposed to controlling the ship; the former will not be Royalty as is in the instant case and hence there is no TDS required under the Act and relevant Act. 6. Ld.D.R relied on the order of lower authorities. 7. We have heard both the parties and perused the material on record. The main contention of ld.A.R is that in these cases, the amount paid by the assessee to foreign shipping company on time charter agreement would not amount to Royalty neither under Explanation-2 or u/s.9(1)(b)(ii) of th .....

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Ltd. (supra). Accordingly, this issue is remitted to the file of ld. Assessing Officer to consider afresh and decide accordingly. 8. The third ground for our consideration is with regard to rejecting the following comparables by the TPO/DRP, which are submitted by the in its Transfer Pricing documents: I. M/s.Gordon Woodroffee Logistics Ltd., II.M/s.Hinudstan Cargo Ltd., & M/s.Tiger Logistice (Inia) Ltd. 8.1 M/s.Gordon Woodroffee Logistics Ltd., This company has been rejected by the TPO on .....

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there was a small profit of ₹ 1/- crore in financial year 2009-10. The financial year involved herein is 2010-11 relevant to assessment year 2011-12. Since the Gordon Woodroffe Logistics is incurred loss in the assessment year under consideration and also in the earlier year , in our opinion it cannot be considered as comparables to the assessee company. Accordingly, the rejection of the TPO is justified. 8.3 M/s.Hinudstan Cargo Ltd., & M/s.Tiger Logistice (Inia) Ltd. This company was .....

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e is directed to furnish the data for the financial year 2010-11 (First April, 31st March) to the TPO, who after due verification, shall consider the same as comparable to the assessee s case so as to determine the ALP as held by the Tribunal in the case of RR Donnelly India Outsource Pvt Lt. Vs. DCIT (supra) 9. The fourth ground is with regard to wrongly selecting the following comparables:- i) NR International Ltd. ii) Natura Hue Chem Ltd. 9.1 According to ld.A.R, NR International Ltd. was wro .....

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