M/S COMPAQ INTERNATIONAL,JAGADHRI vs. DCIT, CIRCLE, YAMUNANAGAR

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 22.02.2019 of the Commissioner of Income Tax (Appeals)-4, Ludhiana [hereinafter referred to as ‘CIT (A)’].

ITA No. 563-Chd-2019 M/s Compaq International, Yamunagar 2 2. That the Ld. CIT(A)-4,Ludhiana is wrong is not allowing relief of Rs. 20,65,171/- u/s 250(6) of the Income Tax Act, 1961. 3. The appellant reserves a right to add, amend or alter any of the grounds of appeal. 4. The appellant prays that the appeal may very kindly be allowed in total. 3. Apart from this, the assessee has taken the following additional

legal grounds of appeal:- 1. "That the Ld. Assessing Officer has erred in reopening the case u/s 148 and, thereby, resorting to the assessment made u/s 143(3)/147.

the legal issue regarding validity of the reopening of the assessment;

hence, the same is taken first for adjudication.

As pointed out through the aforesaid grounds of appeal and further

from the perusal of the paper book pages 81A to 81F, it is revealed that

the Audit party pointed out that the assessee had not deducted the tax at

ITA No. 563-Chd-2019 M/s Compaq International, Yamunagar 3 source on the payments made on account of freight to M/s Movers

International Pvt Ltd., New Delhi, M/s Movers Mumbai and M/s DHL

Lemur Logistic Pvt Ltd etc. and, hence, there was a violation of

provisions of section 194C of the Act.

Officer had no reason to believe that the income of the assessee had

escaped assessment. That it was a change of opinion of the Assessing

Officer. That the entire details were already supplied to the Assessing

Officer during the assessment proceedings carried out us 143(3) of the

Act. However, the Ld. counsel could not point out from record that the

aforesaid issue of no deduction of freight payments was ever examined

by the Assessing Officer during the assessment proceedings. So far as

the issue that the information should come to the Assessing Officer

through some tangible material, the assessee itself has furnished copies

of the audit objections etc. which shows that the aforesaid information

of non-deduction of TDS on the freight payments was supplied to the

Assessing Officer by the audit party by way of audit objections, thus,

the information had come to the Assessing Officer through tangible

material about the escapement of the income of the assessee from

taxation.

that the income of the assessee has escaped assessment after getting

ITA No. 563-Chd-2019 M/s Compaq International, Yamunagar 4 information from tangible material. We, therefore, do not find any merit

in this ground, on this issue, hence, the legal grounds raised by the

assessee regarding the reopening of the assessment are hereby

dismissed.

has raised two issues, firstly, in respect of the addition of

Rs.20,17,393/- on account of disallowance of expenditure on account of

non-deduction of TDS and, secondly, regarding validity of the addition

of Rs. 4,774/- on account of difference in interest calculation on the

partner’s capital.

account of expenditure on export freight is concerned, the Ld. Counsel

for the assessee has submitted that the assessee was not liable to deduct

TDS on payments made to the resident shipping companies which were

acting as agents to the non-resident company. He, in this respect has

relied upon the CBDT Circular No. 723 dated 19.9.1995 and further has

also submitted that since the provisions of section 172 of the Act were

applicable to the case of the assessee and as per law laid down by the

Hon'ble Bombay High Court in ‘CIT vs V.S. Dempo and Co.’ (2016)

66 taxman.com 93 (Bombay), the provisions of Chapter XVII of the Act

for collection of the recovery of the tax and its deduction at source vide

ITA No. 563-Chd-2019 M/s Compaq International, Yamunagar 5 section 195 of the Act, would not be applicable. The Ld. counsel has

further submitted that Ld. CIT(A) while deciding the issue has relied

upon the decision of the Hon'ble Bombay High Court in the Tax Appeal

No.7/2005 in the case of ‘CIT Vs M/s Oriental Goa Pvt Ltd.’ dated

16.10.2009, which issue is not applicable to the facts and circumstances

of the case, whereas, the decision of the Delhi Bench of the Tribunal in

the case of ‘ITO vs Arun Kumar’ ITA No. 5063/Del/2012 vide order

dated 4.12.2015 was duly cited before the Ld. CIT(A), however, the Ld.

CIT(A) failed to refer to the same in the impugned order. The Ld.

Counsel for the assessee has submitted that the aforesaid payments were

made to the resident companies which were agents to the foreign

companies and, therefore, as per CBDT Circular No. 723 of 1995 dated

19.9.1995, the payment was deemed to be made to the foreign companies

and that the law laid down by the Hon'ble Bombay High Court in ‘CIT

vs V.S. Dempo and Co.’ is squarely applicable.

has not proved with reliable evidence that the aforesaid companies to

whom the payments were made, were agents of the foreign companies.

That even the payments were not made to their foreign office.

from the bills and vouchers, it can be ascertained that the payments were

ITA No. 563-Chd-2019 M/s Compaq International, Yamunagar 6 made to the foreign companies through their agent ‘Indian resident companies’.

(अ�नपूणा� गु�ता / ANNAPURNA GUPTA) (संजय गग� / SANJAY GARG) लेखा सद�य/ Accountant Member �या�यक सद�य/ Judicial Member Dated : 23.12.2019 “आर.के.”

आदेशक���त�ल�पअ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु�त/ CIT 4. आयकरआयु�त (अपील)/ The CIT(A) 5. �वभागीय��त�न�ध, आयकरअपील�यआ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File

आदेशानुसार/ By order, सहायकपंजीकार/ Assistant Registrar