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Income Tax Appellate Tribunal, MUMBAI “E” BENCH, MUMBAI
Before: SHRI SHAILENDRA KUMAR YADAV, JUDICIAL & SHRI RAJESH KUMAR.
अपीलाथ� क� ओर से /By Appellant : Shri J. Saravanan, D.R. ��यथ� क� ओर से/By Respondent :Shri Atul Modi, A.R. सुनवाई क� तार�ख/Date of Hearing : 28.06.2016 घोषणा क� तार�ख/Date of Pronouncement : 29.06.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-14, Mumbai, dated 14.06.2013 for A.Y. 2011-12 on following grounds:
A.Y. 11-12 [ITO TDS (OSD) vs. M/s. Express Transport P. Ltd.] Page 2
“i) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in deleting the addition on account of short deduction of TDS on the payment made to Central Warehousing Corporation (CWC), Container Freight Stations (CFSs), Bombay Port Trust (BPT), Airport Authorities (AAI), etc. u/s. 1941 and treating the same as T.D.S. payment u/s. 194C, without properly appreciating the factual and legal matrix of the case, as clearly brought out in his order u/s 201(1)/201(1A) of the Income Tax Act, 1961. ii) On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in holding that the assessee was under no liability to deduct tax u/s 194I of Income Tax Act 1961 and deleting the subsequent demand under the head Crane and Forklift charges determined by the AG vide order passed u/s 201(1) of the Act without appreciating the fact that the same falls within the purview of section 194I of the Income Tax Act, 1961. iii) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the interest u/s 201(1A) of the IT Act, 1961 on the short deduction of tax determined by the AG as the tax determined has already been deleted by him and interest deletion is consequential to the quantum deletion for which further appeal has been recommended vide ground No. i and ii.”
The assessee is engaged in the business of Customs House Agent. A survey u/s.133A was carried out at the assessee’s premises on 24.02.2011 for verification of records to ensure that assessee was deducting taxes at source in accordance with law. From the information gathered, it was noted that assessee was allegedly not deducting taxes from various payments at correct prescribed rates and therefore a notice was issued requiring the assessee to show cause why A.Y. 11-12 [ITO TDS (OSD) vs. M/s. Express Transport P. Ltd.] Page 3 it should not be treated to be an assessee-in-default for not deducting taxes at source properly. Assessing Officer after rejecting the contention of assessee held that assessee did not deduct tax at source as per law or made short deduction of tax while making various payments in course of business. Accordingly, he raised the demand of Rs.1,55,63,128/- against the assessee u/s.201(1)/201(1A) of the Act.
2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) granted relief to the assessee. Same has been opposed on behalf of Revenue inter alia submitting that order of CIT be set aside and that of Assessing Officer be restored. On the other hand, ld. Authorized Representative supported the order of CIT.
2.2 After going through rival submissions and material on record, we find that CIT(A) by following immediately preceding year observed that payment made by assessee on behalf of its clients, represented charges paid in connection with services rendered for obtaining Custom clearance of import/export of goods. The payment was not made for mere use of space. After examining the publications of the Ministry of Commerce, Planning Commission and regulations governing the procedure for custom clearance, it was concluded that CWC, ICD, CFS, BPT and AAI as were statutory custodians of goods till requisite formalities by A.Y. 11-12 [ITO TDS (OSD) vs. M/s. Express Transport P. Ltd.] Page 4 Custom authorities relating to clearance of the goods were completed. Till the Customs clearance procedures were complied with, importer/exporter of goods had legal obligation to keep the goods only within the designated areas of the statutory custodians. In the matter of compliance with clearance procedures, assessee’s clients did not have any option. The regulations framed by the Customs Department prescribed the responsibilities of the statutory custodians who are allowed to operate within the Customs area and permitted to handle the goods in conformity with regulations. Having considered the entire statutory framework and regulations concerning handling of goods till the clearance formalities are complete, it has been held by CIT(A) that the charges paid by importer/exporter through CHA to the statutory custodians cannot be considered to be in nature of “rent” as defined in Section 194I of the Act. Since, the fact in current year were also found identical, therefore CIT(A) held that charged paid by assessee on behalf of importer/exporter to CWC, ICD, CFS, BPT and AAI do not fall within the ambit of expression “rent” as defined in Explanation 1 to Section 194I of the Act. Accordingly, demand in question was deleted. It was pointed out on behalf of assessee that assessee’s own case in ITA Nos. 1426 to 1429/Mum/2013 for A.Ys. 2008-09 to 2011-12, similar issue is decided in favour of assessee. Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so ITA No.5518/Mum/13 A.Y. 11-12 [ITO TDS (OSD) vs. M/s. Express Transport P. Ltd.] Page 5 following same reasoning, we are inclined to interfere with the order of CIT(A). We uphold the same.
As a result, appeal filed by Revenue is dismissed.
Pronounced in the open Court on this the 29th day of June, 2016.
Sd/- Sd/- (RAJESH KUMAR) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai: Dated 29/06/2016 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार, आयकर अपील�य अ�धकरण, मुंबई ।