TMI Blog2018 (10) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... not followed tribunal’s decision applying CBDT’s circular No.723 instead of Circular No.715 (supra) in violation of settled judicial discipline of binding precedents in absence of any judicial precedent to the contrary. We take into account all these facts and settled legal position in light of voluminous documentary evidence that the AO has erred in treating the instant taxpayer to be an assessee in default u/s 201(1) of the Act. We accordingly accept assessee’s latter substantive ground to reverse the Assessing Officer’s action in entirety. - ITA No.2137/Kol/2014 And ITA No.92/Kol/2015 - - - Dated:- 12-10-2018 - Shri S.S.Godara, Judicial Member And Shri, M. Balaganesh, Accountant Member For The Assessee : Shri Ravi Tulsiyan, FCA For The Respondent : Shri S. Dasgupta, Addl. CIT-DR ORDER PER S.S.Godara, Judicial Member:- The assessee and Revenue have filed their instant cross-appeal for assessment year 2012-13 arise against the Commissioner of Income Tax (Appeals)-I, Kolkata s order dated 24.09.2014, passed in case No.284/CIT(A)/I/W-58(3)/2014-15, in proceedings u/s 201(1)/201(1A) of the Income Tax Act, 1961; in short the Act . Heard both th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was in the nature of fees for technical services covered u/s. 194J. The pp has not contradicted the above observations and has claimed that the transactions was not a Works Contract. In fact it has only submitted a copy of the order dated 26.12.2011 placed by the Appellant with Eviro Systems and equipment but not the quotation/offer or Invoice of the supplier, therefore the terms and conditions of the Order are not evident. In view of the same, it is seen that the appellant has not been able to contradict the findings of the AO that the payment was towards fees for technical services, here the onus is on the Appellant to establish that it was not liable for TDS, which has not been satisfactorily discharged. Accordingly its submissions cannot be accepted and the demand raised by the AO for non-deduction of TDS is confirmed. 3. We have given our thoughtful consideration to rival contentions. There can hardly be any dispute about the assessee having made the impugned payments in lieu of acquiring its air pollution control system from the payee party. The Revenue case before us is that same attracts u/s 194J of the Act since in the nature of fee for technical service requiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to ₹23,61,604/-and ₹7,08,481/-; respectively. The CIT(A) has granted part relief to the assessee as follows:- 4.2 The submissions of the Appellant have been considered. It is seen that the survey u/s. 133A had been conducted on the premises of the appellant on 03.-3-2014, consequent to which the AO has held in his order u/s. 201(1)(201(1A) that the appellant was liable for non-deduction of tax on Ocean Freight payment of ₹ 11,67,49,537/-. IT has been explained in appeal that the app is a manufacturer of various products Aluminium sheets, corrugated sheets galvanized sheets, etc. and in the course of business it incurs expenditure towards Ocean/Sea Freight and it has the modus operandi which has been explained as under:- i. The appellant company requests the agents of Non Resident Shipping Companies (NRSCs) for their quotation of Sea Freight for various locations on monthly basis. ii. On receipt of quotations from agent of different NCCs, the Appellant negotiates with those agents and finalizes the freight rates over email. iii. Thereafter, the appellant informs the forwarders to place the container requisitions with the agents of NRSC. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Meridiani Cargo Line 2,32,500 Authorised agent of N.R. Shipping Co. 2,332,500 Meridian Cargo Line 1,46,450 Authoried agent of N.R. Shipping Co 1,46,450 Nilja Shipping Pvt Ltd 45,10,236 MEARSK 45,10,236 Tierra Logistics Pvt. Ltd 44,32,186 MEARSK 44,32,186 Total 11,67,49,537 11,67,49,537 It has also been explained that the rates/terms of transactions are negotiated between the appellant and the agents of NRSC. Bill of Lading is issued by agents of NRSC directly the appellant and it is shown as shipper in the said Bill of Lading. Further the amount of invoice raised by Forwarder on the appellant is for the amount charged by agents of NRSC and there is no element of income in it. Forwarders get commission of 2% from agents of NRSC and nothing from the appellant. Whereas in case of other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... par with carriage paid or payable to such owner or charter. Thus, even as the amounts in the nature of demurrage etc. may not end up being paid to non-residents, these are treated as amounts falling within special provisions of section 172. This stands clarified in CBDT Circular No. 723, dated 19-9-1995 wherein these amounts have been taken outside the purview of section 194C. This Circular has made it further clear that where payments an made to shipping agents of non-resident ship owners or charter ship at a port in India provisions of section 172 will apply because the agent steps into the shoes of the principal. However, the problem arises only when restrictive interpretation is placed on the boards circular referred to hereinabove when the Assessing Officer has sought to draw distinction on the basis of the status of the agents. We would like to mention that even if the agent is to be treated as resident, by virtue, his acting on behalf of nonresident shippers or charters, he receives payments primarily on behalf of his principal i.e., non-resident ship owners or ships charters shipped at a port in India. In our opinion, even if these amounts are inclusive of small element of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and Revenue aggrieved to the extent indicated in their respective pleadings. The Revenue seeks to revive the Assessing Officer s action in enterity whereas the assessee s grievance is that CIT(A) ought to have reversed the Assessing Officer s action in full tha granting part relief. We notice at this stage that the assessee has filed its additional evidence petition under Rule 29 of the Income Tax Appellate Tribunal Rule, 1963 for placing on record Form 26AS in respect of its payments made to the payee parties M/s Globelink WW India, LCL Logistics India and Tierra Logistics (P) Ltd s. respective declarations that they never received any commission income as per the Assessing Officer s stand. It is further pleaded that these 26AS statements are very much relevant for appropriate adjudication of the issue before us. This clinching fact of relevancy has not been disputed at the Revenue s behest. We therefore accept assessee s above caption additional evidence petition to take on record. The said documents as part of case file. 6. We now advert to assessee s grievance first of all. It has come on record as per the relevant material in the case file that its impugned paym ..... X X X X Extracts X X X X X X X X Extracts X X X X
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