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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI V. DURGA RAO& SHRI D.S. SUNDER SINGH
आदेश /O R D E R
Per Shri D.S.Sunder Singh, Accountant Member : This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] in Appeal No.402/11-12 dated 18.06.2018 for the Assessment Year (A.Y.)2009-10.
All the grounds of appeal are related to the addition made by the Assessing Officer (AO) u/s 40(a)(ia) of the Act in respect of freight charges
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paid by the assessee. During the assessment proceedings, the Assessing Officer (AO) found that the assessee has not deducted the TDS on a sum of Rs.13,75,677/- incurred towards Ocean Freight. Therefore, the AO disallowed the above expenditure u/s 40(a)(ia) of the Act. The assessee went on appeal before the CIT(A) and contended that the he has paid the Ocean Freight Charges to the agents of nonresident ship owners, therefore, argued that as per Circular 723 of CBDT dated 19.09.1995, the assessee is not obliged to deduct the TDS u/s 194C and 195 of the Act and accordingly filed the copies of invoices of A.S.Shipping Agencies Pvt. Ltd., Gen Shipping Pacific Line PTE Ltd., etc. However, since, the said documents were not furnished before the AO at the time of assessment proceedings, the Ld.CIT(A) rejected the additional evidence filed by the assessee and dismissed the appeal of the assessee.
Against which the assessee filed appeal before this Tribunal. During the appeal hearing, the Ld.AR argued that the Ld.CIT(A) ought to have admitted the additional evidence, since, Circular No.723 dated 19.09.1995 exempt the assessee from deduction of tax at source on payments made to shipping agents of nonresident ship owners and the assessments are to be made under section 172 of the Act. The Ld.AR further submitted that there
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was no occasion for the assessee to submit the evidence, since, the AO has never asked for the same. Therefore, requested to delete the addition and set aside the order of the Ld.CIT(A).
On the other hand, the Ld.DR strongly supported the orders of the lower authorities.
We have heard both the parties and perused the material placed on record. As per para No.2 of the assessment order, the authorized representative of the assessee appeared before the AO and furnished the information called for. There was no indication from the assessment order that the assessee failed to furnish any of the information called for by the AO. The AO made the addition for non deduction of tax at source without examining the applicability of TDS provisions in the case of Ocean Freight. As per Circular No.723 of CBDT, there is no requirement of deduction of tax at source in case of payments made to shipping agents for carriage of passengers, shipped at a port in India since, the shipping agents steps in to the shoes of nonresident ship owners. Therefore, we remit the matter back to the file of the AO with a direction to admit the additional evidence and examine the issue of deductibility of tax on the payments made to the shipping agents u/s 194C / 195 or otherwise in the light of Circular No.723
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(supra) and decide the issue afresh after giving opportunity to the assessee. Accordingly, the appeal of the assessee is allowed for statistical purpose.
In the result, appeal of the assessee is allowed for statistical purpose.
Order pronounced in the open court on 7th February, 2020.
Sd/- Sd/- (िी.दुगाा राि) (धड.एस. सुन्दर धसंह) (V. DURGA RAO) (D.S. SUNDER SINGH) न्याधयक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER नवशधखधपटणम /Visakhapatnam नदनधंक /Dated : 07.02.2020 L.Rama, SPS
आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee – Sri Cherukuri Raghu Kiran, D.No.7-320, Main Road, Chimakurthy, Prakasam Dist. 2. रधजस्व/The Revenue – Asst.Commissioner of Income Tax, Circle-2(1), Guntur 3. The Pr.Commissioner of Income Tax, Guntur 4. The Commissioner of Income Tax (Appeals)-1, Guntur 5. तिभागीय प्रतितिति, आयकर अिीिीय अतिकरण, तिशाखािटणम/DR, ITAT, Visakhapatnam 6.गार्ड फ़ाईि / Guard file आदेशािुसार / BY ORDER // True Copy //
Sr. Private Secretary ITAT, Visakhapatnam