DCIT, NEW DELHI vs. M/S. HELLMANN WORLDWIDE LOGISTICS INDIA P. LTD., NEW DELHI

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “D”: NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA No. 6390/Del/2013 (Assessment Year: 2007-08) DCIT, Vs. Hellmann Worldwide Circle-12(1), Logistics India P. Ltd, New Delhi 110, 1st Floor, Akashdeep Building, 7, Tolstoy Marg, New Delhi PAN: AABCH7715F (Appellant) (Respondent)

Revenue by : Shri Amit Jain, Sr. DR Assessee by: Shri Karnik Gulati, CA Date of Hearing 23/07/2018 Date of pronouncement 01/10/2018

O R D E R PER PRASHANT MAHARISHI, A. M. 1. This appeal is preferred by the revenue against the order of the ld CIT(A)-XXVII, New Delhi dated 25.09.2013 for the Assessment Year 2007-08. 2. The revenue has raised the following grounds of appeal:- “1. Whether Ld. CIT (A) was correct on facts and circumstances of the case and in law in allowing the depreciation @ 60% on computer peripherals which includes Switches, Router and Multiplexer without considering that these items are capable of their independent use and are not part of computer? 2. Whether Ld. CIT (A) was correct on facts and circumstances of the case and in law as the ld. CIT (A) does not have the power to set aside and therefore, the ld. CIT (A) erred in directing the AO to verify part of claim and allow accordingly the TDS credit on freight expenses? Page | 1

scanners, and server form an integral part of the computer system. In fact, the computer accessories and peripherals cannot be used without the computer. Consequently, as they are part of the computer system, they are entitled to depreciation at the higher rate of 60 per cent. Hence, computer peripherals are entitled to depreciation at the rate of 60%, as they are part of computer. In view of this ground number one and two of the appeal are decided in favour of the assessee and against revenue, hence dismissed. 6. Ground number 3 & 4 of the appeal are with respect to the deletion of the disallowance of Rs. 3033900/– because of non- deduction of tax at source by assesee on various payments made to various parties. The Ld AO noted that there are other expenses paid of Rs, 3.03 crores and whether that has been tax deducted thereon or not. Assessee submitted it is a reimbursement of expenses on cost-to-cost basis and hence provisions of TDS are not applicable. Learned assessing officer recorded that assessee has not filed any details to substantiate its claim in its books of accounts and not filed any party wise payment details and therefore the contention of the assessee was rejected. AO noted that assessee is avoiding the provisions of section 194C in the garb of reimbursement of expenditure and therefore he disallowed the expenditure paid because of freight without deducting tax at source. 7. On appeal before the learned CIT – A, on query, assessee filed the breakup of the above amount under different heads as asked. Assessee submitted the breakup and stated that on Rs. 2.49 crores no tax has been deducted at source. On ₹ 25.44 lakhs TDS certificates were available and on other sum of ₹ 28.30

lakhs tax has already been deducted at source. The learned CIT – A, directed AO to verify and delete the disallowance with respect to Rs. 25.44 lakhs. The disallowance of ₹ 28.30 lakhs was deleted as taxes were deducted by the assessee. Regarding a sum of Rs. 2.49 crores assessee has not deducted tax as it is paid to Airport authority of India . Learned CIT – A has noted that provisions of section 194C are not applicable on this payment. Further on a sum of Rs. 45, 09, 018 the learned CIT – A noted that it is paid as a destination charges for services rendered outside India and therefore tax deduction at source provisions are not applicable. The other sums paid by the assessee of Rs. 4 .48 lakh on account of agency charges on which tax has been deducted. It was further noted that Rs. 19.77 lakhs was paid as a reimbursement to Airport authority of India charges and ₹ 28.73 lakhs was paid as a reimbursement of stamp duty. Therefore, the addition of ₹ 3.03 crores was deleted. 8. The learned departmental representative supported the order of the learned assessing officer and stated that the assessee has not submitted any details before the learned assessing officer and the learned CIT (A) has taken the details and deleted the addition without asking for the remand report of the assessing officer. He further stated that there is no provision cited by the learned CIT –A holding that Airport authorities of India payments are not covered under the provisions of section 194C of the act. 9. Learned authorized representative relied upon the order of the learned CIT – A stating that provisions of section 194C does not apply to the facts of the case as recorded by the learned CIT – A. 10. We have carefully considered the rival contention and perused the orders of the lower authorities. The learned CIT – A has

deleted the addition holding that where the TDS certificates are available there cannot be any disallowance and where the tax has already been deducted at source by the assessee, the disallowance cannot be upheld. He directed the AO to verify these facts and after verification, he may delete the disallowance. Revenue cannot be aggrieved with this finding. Further with respect to the sum of Rs 2.49 crores on which tax has not been deducted the learned CIT – A noted that it has been paid to the Airport authority and the provisions of section 194C does not apply. He also supplied reason in paragraph number of 17 of his order as under:- “17. As regards to Rs. 24963587/- in which TDS has not been deducted, a sum of more than Rs. 1.12 crores is shown as paid to Airport authority and provisions of section 194C is not applicable to these payments and thus TDS is not required to be deducted from these payments. A sum of Rs. 4509018/– was paid as the destination charges for services rendered outside India and therefore, TDS is not deductible on this amount. Other major expenses was paid to M/s Clearfest air cargo agencies and TDS was deducted on service charges of Rs. 448,800/–. As per the detailed submitted a sum of Rs. 1977775/– was paid as reimbursement of Airport authority of India charges and Rs. 2873318/– was made as a reimbursement of stamp duty. The remaining amount were small amounts on which requires no TDS deductions. Based On the evidence submitted, the appellant has deducted TDS wherever required and in other cases 194C is not applicable and therefore the addition was deleted.” 11. The learned departmental representative could not point out any infirmity in the order of the learned CIT – A. We have also noted that Airport authority of India has been constituted under The Airport Authority of India Act 1994 . Therefore, payment made to it is covered under section 196(iii) of the act. Even the same is claimed to be reimbursement, which is not disputed by the Page | 5

learned departmental representative. In view of this, we do not find any infirmity in the order of the learned CIT – A. Accordingly ground number 3 & 4 of the appeal dismissed. 12. In the result, appeal filed by the learned assessing officer is dismissed. Order pronounced in the open court on 01/10/2018. -Sd/- -Sd/- (AMIT SHUKLA) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:01/10/2018 A K Keot Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi