URAI IMPEX P.LTD,MUMBAI vs. ITO 8(3)(4), MUMBAI

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ITA 367/MUM/2017Status: DisposedITAT Mumbai13 October 2017AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the issue was covered by the jurisdictional Bombay High Court decision in CIT vs. Gujarat Reclaim and Rubber Products Ltd. This decision clarified that circulars in force during the assessment year, which supported the assessee's position, could not be retrospectively withdrawn.

What were the facts?

The assessee paid commission on export sales to foreign parties without deducting tax at source. The Assessing Officer made an addition of Rs. 3,63,226/- on this account.

What were the issues?

Whether tax was required to be deducted at source on commission paid for procuring export orders abroad when no services were rendered in India. The applicability of CBDT circulars in force during the relevant assessment year.

Which sections of the Income-tax Act were involved?

Section 195

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI D.T. GARASIA

For Appellant: Shri R.N. Vasani, A.R. & Shri V.H. Vasani, A.R
For Respondent: Smt. Hemalatha, D.R
Hearing: 07.08.2017Pronounced: 13.10.2017

Per D.T. Garasia, Judicial Member:

1.

The present appeal has been preferred by the assessee against the order dated 30.11.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10.

2.

The short facts of the case are as under: During the year assessee has paid commission on export sale. This commission is made to M/s. Yohannis Sergawi Asmahegn and Cherinet G Giorigis. The assessee did not deduct the tax at source. The assessee submitted that commission was paid for procuring the order abroad and no services were rendered in India at any time during the year under consideration. Therefore, Assessing Officer (hereinafter referred to as the AO) has made the addition of Rs.3,63,226/-.

2 M/s. Urai Impex Pvt. Ltd. 3. During the course of hearing, the Ld. A.R. submitted that the issue in controversy is covered by the decision of Mumbai Tribunal in the case of ACIT vs. Rapid Pack Engg. (P.) Ltd. 46 taxmann.com 330. In support of his case, the Ld. A.R. further relied upon the decision of Hon’ble Bombay High Court in the case of CIT vs. Gujarat Reclaim and Rubber Products Ltd. 383 ITR 236 (Bom.)

4.

The Ld. D.R. relied upon the order of the Revenue authorities

5.

I have heard the rival contentions of both the parties. I find that the issue in controversy is covered by the decision of Hon’ble Jurisdictional Bombay High Court in the case of CIT vs. Gujarat Reclaim and Rubber Products Ltd. 383 ITR 236 (Bom.) wherein the Hon’ble Bombay High Court has held as under: “This Circular of 1969 was admittedly in force during the two assessment years. It was only subsequently, i.e., on October 22, 2009 that the earlier Circular of 1969 and its reiteration as found in Circular No. 786 of 2000 were withdrawn. However, such subsequent withdrawal of an earlier Cir cular cannot have retrospective operation as held by this court in UTI v. P. K. Unny [2001] 249 ITR 612 (Bom). (i) In view of the above, not only the entire issue stands concluded in favour of the respondent-assessee in the present facts by the Central Board of Direct Taxes Circular Nos. 23 of 1969 and 786 of 2000 which were in force during the subject assessment years but also by the decision of the apex court in Toshoku Ltd. (supra) in favour of the respondent-assessee. Thus, no substantial question of law arises in the question framed for our consideration. Accordingly, question (a) is not entertained.”

6.

Respectfully following the above decision, I allow the appeal of the assessee. Order pronounced in the open court on 13.10.2017.

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