TMI Blog2012 (7) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciate that the assessee during assessment proceedings did not furnish necessary evidence to support that the transactions were trading/purchases but before the Ld. CIT(A) the assessee has provided various details in the form of paper book which the Ld. CIT(A) has admitted in violation of Rule 46A of the I.T. Rules. c) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that details placed before the Ld. CIT(A) were in the nature of additional evidences which were never submitted before the assessing Officer. So the exact nature of transaction i.e. whether it is contract / for work or contract for sale of goods remained for verification. Ld. CIT(A) has violated the Rule 46A of I. T. Rules by not according an opportunity to A.O. before admitting additional evidences. d) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that Sec. 9(1) stipulates the deeming provisions for income to accrue or arise in India all such income arising directly or indirectly through any business connection in India, or through or from any property in India or from an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase of products for resale / trading. During the course of survey, the survey team had asked the appellant whether tax was being deducted on payment of Job Work charges. The appellant was also asked to give copies of agreement with Job Workers which were submitted by the appellant vide letter dated 10/12/2008. During the survey, the appellant was also asked whether tax is being deducted on products purchased for trading activity as probably the ITO was of the view that these purchases were covered u/s 194C. To this, the appellant had replied vide letter dated 10.12.2008 and submitted that the appellant felt that there was some misconception on the part of ITO. In case of these purchase transactions, the vendors had charged Excise Duty, Sales Tax, VAT and other applicable levies on the sales value and hence such purchases were not covered u/s 194C of the Act. In spite of all these clear facts, the ITO has described a contract between the appellant and one Job Worker Shiel Industries in detail in the assessment order (which has no relation with transactions of Trading goods purchased). This was a pure job work contract and tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deducted. 5. On considering these submissions the CIT (A) held as under: I have gone though the order passed by the AO carefully. I have also gone through the paper book and perused the submission of the appellant. On perusal of details and relevant documentary evidence, there remains no doubt that the AO has confused himself in considering purchases of goods for trading with that of payment of job charges. The finding of the AO and its conclusion is based on the interpretation of agreement with M/s. Shiel Industries which is a job work party. There is no doubt that in case of job work, TDS under section 194C is deductible and the appellant has deducted the applicable TDS. However, what is the subject matter of appeal is whether TDS is deductible on purchase of trading goods both local and import. From the details submitted by the appellant and on perusal of factual position, it becomes clear that the assessee has effected purchases of goods for trading of ₹ 27.39 crores in India. Since the transaction is purely of purchases, TDS is not deductible under section 194C of the Income Tax Act, 1961. The case of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein the transaction between assessee and manufacturers were those of sale of goods and were not in nature of works contract. 8. We have heard the arguments and gone through the facts and evidences brought on record. We find that as a matter of fact, the CIT(A) has come to a logical conclusion that the assessee had complied with the provisions of Chapter XVII, wherever it was applicable. We have gone through the details of TDS filed and find that M/s. Sheil Industries was one of the vendors of the assessee and the TDS was duly deducted. Based on this, we cannot accept the version of the ITO that all purchases too must be brought under the TDS net. The assessee, from its extensive details has submitted before the ITO (TDS) the quantum of domestic purchases and quantum of imported purchase on which other statutory levies had been paid. We, therefore, endorse the decision of the CIT(A) in deleting the addition made by the ITO u/s 201(1) and 201(1A). 9. The ground of appeal by the department, is thus rejected. 10. Grounds no. (b) and (c) could not be seen to be arising from the impugned order of the CIT(A) and even the DR was unable to sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ₹ 23,03,71,255/- and payments made for professional fees at ₹ 2,85,34,566/- that provisions for TDS are not applicable, hence we delete the same here as well, holding that no disallowance is liable to be made under section 40(a)(i). 17. So far as TDS on freight at ₹ 1,28,23,566/-, it has been shown that there was no contract as such, with the transporter and the assessee. In absence of any contract, TDS provisions cannot be attracted, hence, the disallowance is deleted. 18. On the TDS on sales promotion expenses at ₹ 1,89,85,166/- the AR reiterated that wherever it was applicable, TAS was deducted and wherever the amounts were below the threshold limit, no TAS was required to be deducted, hence, the provisions were not applicable. 19. We find that the decision of the CIT (A) is based on facts which we endorse. 20. We, therefore, delete the disallowance sought for by the AO. 21. In the result, the appeal filed by the department is dismissed. Appeal by the department in ITA No. 2824/Mum/2010 is dismissed. Appeal by the department in ITA No. 5869 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
