JCIT (OSD) CIR 2(2), MUMBAI vs. MARITIME SERVICES P.LTD, MUMBAI

O R D E R

PER RAJESH KUMAR, A. M: These are the two appeals filed by the respective parties. Appeal for the assessment year 2008-09 is filed by the assessee against the order of ld.CIT(A) dated 1.8.2012 and the appeal for the assessment year 2009-10 is filed by the revenue against the order dated 5.10.2012. Since these appeals pertain to the same assessee, hence, there are clubbed together, heard together and are being decided by this common order for the sake of convenience. 2. First we shall take up the appeal by the revenue bearing 2013. At the outset, we have noticed that the tax effect in the appeal of the revenue is below Rs.10 lakhs, therefore, the same is not maintainable as per the CBDT Circular No.21/2015, dated 10th December, 2015. We found that as per the recent Circular No.21/2015, dated 10th December, 2015, issued by the CBDT, the monetary limit has been revised for filing of appeal before ITAT by the revenue fixing the tax effect limit of Rs.10 lakhs. In the instant case, the tax effect is below Rs.10 lakhs, therefore the same is not maintainable and liable to be dismissed in limine. This Circular is retrospective and applicable to the pending appeals also. 3. Considering the above CBDT Circular, we dismiss the appeal of the revenue. 4. Now we will take up the appeal of the assessee for the assessment year 2008-09. 5. The only issue raised in the grounds of appeal

is against the confirmation of addition of Rs.3,69,514/- by the ld. CIT(A) as made by the AO under section 40(a)(ia) of the Income Tax Act, 1961 for non deduction of TDS. The facts of the case are that the assessee filed its return of income on 27.9.2008 declaring total income of Rs.3,58,34,200/- which was duly processed under section 143(1) of the Act. Thereafter, the case of the assessee was selected for scrutiny and the statutory notices under section 143(2) and 142(1) were issued and served upon the assessee. During the course of assessment proceeding, the AO found that the assessee has claimed maintenance and office expenses amounting to Rs.21,77,976/- under Scheduyle „C‟ (administrative expenses) annexed to profit and loss account which was found to be paid to M/s Caxton House Properties Pvt Ltd as detailed below: S.No. Particulars Amount(Rs.) 1 To Caxton House Properties Pvt. Ltd 76,864 Being amount payable to Caxton House Properties Pvt. Ltd. aquarist inv. No. 351, 352, 360, 365 towards miscellaneous expenses as .per cir. Dated 22.3.2007 against Room No. 405, 303, 309, 308, 301, 302. 2 To Honkong Bank - Bombay 144120 Cheque. No. 600386 Caxton House Properties Pvt. Ltd. amt paid against circular dated 25.4.07' towards adhoc payment on account of BPT dues 301,302, 309, 309,308,405. 3 To Caxton House Properties Pvt. Ltd.. 75731 Amount payable to Caxton House Properties Pvt. Ltd. Amt. paid towards Inv. No; 38,39, 52,47 ' 4 4 To Caxton House Properties Pvt. Ltd 72799 Amount payable to Caxton House Properties Pvt. Ltd. Amount paid against Inv.47,52,39,38 3,69,514 Vide order sheet entry dated 22.11.2010, the assessee was asked to explain as to why the amount of Rs.3,69,514/- should not be disallowed on account of non deduction of TDS under the provision of section 40(a)(ia) of the Act which was replied and responded by the assessee vide letter dated 29.11.2010 by submitting that the company to whom the payment was made was rendering services of building maintenance which were similar to that payments in the nature of mutuality paid to the to meet the expenses on behalf of its shareholders and therefore the provisions of TDS were not applicable. However, the AO was not convinced with the submissions of the assessee and came to the conclusion that the provisions of section 194C were clearly applicable to the case of the assessee as the payment was made to M/s Caxton House Properties Pvt Ltd for carrying out work, repair and maintenance of the building occupied by the assessee and also that the said company was a private limited company under the provisions of Companies Act, 1956 and having it is a separate entity. According disallowed and added the amount of Rs.3,69,514/- to the total income of the assessee by making various additions interalia Rs.3,69,514/- for non deduction of tax at Source. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld.CIT(A) who also dismissed the appeal of the assessee by observing and holding as under : “5. I have carefully considered the above facts and find no merit in the contentions of the appellant. The appellant has admitted that considering the nature of work done, provisions of section 194C were applicable. The fact that the recipients income was taxable or not is irrelevant in so far as the liability of the appellant to make TDS is concerned. Nothing has been brought on record to show that the said concern requested for no deduction certificate in terms of section 197 of the Act. In such situation, the liability of the appellant to make TDS was very much there and could not be avoided. The fact that no such disallowance -was made previously is also not relevant in view of the applicability of the provisions to the facts of the case. Moreover, principles of resjudicata are not applicable to income tax proceedings. Since no TDS was made, the disallowance made by the AO is upheld”

6. We have carefully considered the rival contentions, perused the material placed before us during the course of hearing including the decision of authorities below. The ld. AR submitted before us that the payment was made to M/s Caxton House Properties Pvt Ltd which were of the nature of municipal taxes, maintenance charges, BMC Water charges on account of BPT charges and others. The ld. AR drew our attention to the bills issued by M/s Caxton House Properties Pvt Ltd copies of which are filed at paper book at pages 22 to 27. We also find that there was no element of profit in the said bills as the company was rendering services of maintenance of building to the member