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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI G. S. PANNU, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The revenue has filed the present appeal against the order dated 29.06.2016 passed by the Commissioner of Income Tax (Appeals) - 28, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2012- 13.
The revenue has raised the following grounds:- “1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the provisions of Section 40(a)(ia) of the Act due to non deduction of TDS in respect of payments made by the assessee for and on behalf of its clients, which are fully reimbursed to it by its clients, cannot be invoked in the case of the assessee, and thereby directing to delete the ITA. No.5321/M/2015 A.Y.2012-13 disallowance of Rs.3,43,83,646/- u/s 40(a)(ia) of the Act, without appreciating the facts that- The decision of the Hon’ble ITAT in the assessee’s own case for A.Y. 2010-11 which has been relied upon by the Ld. CIT(A) to grant relief to the assessee has drawn sustenance from the decision of the Hon’ble Mumbai ITAT in the case of M/s Rank Shipping Agency Pvt. Ltd., which has not been accepted by the Department and appeal u/s 260A has been admitted been accepted by the Department and appeal u/s 260A has been admitted by it vide I.T. Appeal no. 1271 of 2013. The Hon’ble Jharkhand High Court in the case of CIT Vs. Md. Tabarak, 61 taxmann.com 94 while deciding the issue in favour of revenue, has held that though the assessee has acted as a broker for and on behalf of his clients, nonetheless, he is liable to deduct TDS u/s, 194C of the Act, and in light of failure to do so, the disallowance u/s 40(a)(ia) of the Act made by the authorities below was to be confirmed.” The appellant prays that the order of the AO should be restored and order of the CIT(A) should be set aside. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.”
3. The brief facts of the case are that the assessee filed its return of income on 29.09.2012 for the assessment year of 2012-13 declaring total income to the tune of Rs.15,85,680/-. The return was processed u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”). Thereafter, the case was selected for scrutiny. Thereafter, notice u/s.143(2) of the Act dated 18.09.2013 was issued and served upon the assessee. Subsequently, notices u/s 142(1) were issued. The assessee is engaged in the business of providing logistic service relating to export/import viz. transportation, warehousing, packaging, custom clearance, arranging container with shipping lines, arrangement of labor for offloading/loading cargo etc. On verification, if was found that the assessee received contractual receipts to the tune of Rs.4,23,10,910/- on which TDS amounting to Rs. 12,06,881/- was deducted. The assessee also made payment of Rs.3,43,83,646/- to different container freight stations/ yard companies of the JNPT/BPT for ITA. No.5321/M/2015 A.Y.2012-13 various services rendered by them. The container freight stations/ yard services/yard companies were mostly private parties who provided different services to the assessee and the payment was made to them by assessee. No TDS was deducted on payment made to Rs.3,43,83,646/- in view of the provisions u/s 40(a)(ia) of the Act. After the service of notice, the claim of the assessee was declined and the income of the assessee was assessed to the tune of Rs.3,59,69,550/-. The assessee filed an appeal before the CIT(A) who allowed the claim of the assessee, therefore, the revenue is filed the present appeal before us.
We have heard the argument advanced by the Ld. Representative of the parties and perused the record. The Ld. Representative of the revenue has argued that the claim of the assessee has wrongly been allowed by the CIT(A) therefore in the said circumstances the order of the CIT(A) is not justifiable, hence, is not liable to be set aside. However, on the other hand, the Ld. Representative of the assessee has refuted the said contentions. Before going further, it is necessary to advert the finding of the CIT(A) on record.:- “Ground No. 2 to 7 These grounds relate to the action of the AO in making an addition of Rs.34383646 as disallowance u/s 40(a)(ia) of the Act in respect of payments made to Container Freight stations/yard companies. I find that the issue is covered in favour of the appellant by the order of CIT(A) in the appellant’s own case for A.Y. 2010-11 which has been confirmed by the Hon’ble ITAT. I have perused the orders of the CIT(A)-23 and Hon’ble ITAT in ITA. No, 7297/M/2013 dated 27.05.2016. In the said order, the ITAT has dismissed the appeal of the AO and upheld the order of the CIT(A)-23. Following the judgment of Hon’ble ITAT and CIT(A)-23 in the assessee’s own case, it is clear that the ITA. No.5321/M/2015 A.Y.2012-13 provisions of sec. 40(a)(ia) of the I.t. Act,1961 cannot be invoked in the case of the appellant in respect of the payments made by it to the yard companies (CFSs, etc.) for and on behalf of its clients which are fully reimbursed to it by the clients. Therefore, the addition of Rs.34383646 is directed to be deleted.”
On appraisal of the above said finding, we notice that the CIT(A) has allowed the claim of the assessee on the basis of the finding of the Hon’ble ITAT I the assesse’s own case in dated 27.05.2016 in which the claim of the assessee has been allowed for the A.Y.2011-12. The nature of the transaction is the same. No distinguishable fact has been placed on record. CIT(A) has passed the order by honoring the order passed by the Hon’ble ITAT in the assessee’s own case in ITA. No. 7297/M/2013 dated 27.05.2016. Nothing contrary to the said law has been produced before us. Therefore, the said circumstances, we are of the view that the CIT(A) has passed the order judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, this issue is decided in favour of the assessee against the revenue.