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Before: SHRI S.V. MEHROTRA & MS. SUCHITRA KAMBLE
ORDER PER SUCHITRA KAMBLE, JM
This appeal is filed by the assessee against the order dated 01/12/2013 passed by CIT (A)’s Meerut
The grounds of appeal are follows:-
“1. On the facts and in the circumstances of the case the Ld. CIT (A) is not justified in failing to consider CBDT Circular No. 723 dated 19/9/1995 and in holding that payment made to ship owner or its agent in India towards freight for carrying goods to foreign ports for export purpose is liable to TDS u/s 194C of the Income-tax Act.
2. On the facts and in the circumstances of the case the Ld. CIT(A) is not justified in holding that payment to non- resident players was in the nature of advertisement and has failed to consider that the amount paid to non-resident players was not income of the said non-resident players under the provisions of Section 5 of the I.T Act since the same was neither received nor accrued to the said non- resident player in India.
3. Other grounds, if any, shall be raised at the time of hearing of the appeal with the leave of the Hon’ble Members.
The assessee Company is a manufacturer, Trader & Exporter of Spots goods. During the course of survey different details were checked and verified. The assessee was asked to submit the Balance Sheet TDS returns filed for F.Y 2007-08 to 2009-10. The director of the Company informed that there is dispute among the other directors of the Company and the matter is pending with Company law Board and no balance sheet could have been finalized till date hence no return is filed for F.Y 2007-08 to 2009-10. The assessee submitted the details of Balance Sheet and relevant papers for the F.Y 2006-07 only. The details of TDS returns filed have been filed for the F.Y 2007-08 to 2009-10 and was checked by Assessing Officer. The assessee was required to submit the details as per summon dated 16/12/2009 for verification of TDS deducted and deposited in time to the Govt. a/c.
During the discussion of the case it was asked as to why the gross amount of Rs.58,39,478/- less custom duty paid to the Govt. Rs.34,22,418/- paid towards the fright and clearing & forwarding charges as submitted vide reply dated 19/03/2010 may not subjected to tax @ 2% as provided in CBDT Cir. No. 715 dated 8/8/1995. Further, it was also asked to explain as to why the amounts of Rs.12,76,250/- paid to non-resident players on which no TDS was deducted, be charged to tax. In view of the provisions of Section 194E read with Section 9(1) (vi) (b &c) and Section 115BBA of the Income Tax Act @ 10% as provided. The assessee was asked to submit the justification of non deduction of TDS and also the agreements, made with these players which have not been provided till the date of writing the order.
The Assessing Officer added Rs.21,46,910/- as a freight charges and Rs.2,992/- as amounts paid to the non-resident players.
The CIT (A) while deciding the first grounds has partly allowed the same by excluding carriage of goods by Railways u/s 194C Explanation to the same. The CIT (A) while deciding Ground No. 2 held that whether or not the players have performed in India during the year under consideration, the same is irrelevant after examining the applicability of Clause 2 of Sub Clause 1 of Section 155BBA of the Act and upheld the order of the Assessing Officer.
As relates to Ground No. 1, the Ld. AR submitted that the freight charges which was paid, comes under the miscellaneous expenses and the same is covered by jurisdictional Delhi High Court in case of CIT Vs. M/s DLF Commercial Project Corporation of 2012 pronounced on 15.07.2015 wherein it was held that the assessee was not required to deduct TDS on reimbursement expenses paid to M/s DLF Land Ltd. The Ld. AR further submitted that in this particular case, the assessee has submitted a chart showing therein various payments made to the various parties as related to re-imbursement charges such as air freight, ocean freight charges in land haulage charges.
As relates to Ground No. 2, the Ld. AR submitted that the payments were made to a Sri Lankan Cricketer and Pakistani Cricketer and there is no agreement between the parties so Section 52 will be applicable as it is income from non-resident received outside India. Thus, it cannot be taxable.
The Ld. DR submitted that there should be an agreement between the parties because the international players will never play without having any documentary agreement. The Ld. DR relied upon the order of the Assessing Officer and the CIT (A)’s order.
We have perused all the records and heard both the parties. From the records, it is evident that nowhere in the assessment proceedings before the Assessing Officer as well as CIT (A), the assessee claimed that the freight charges were the reimbursement charges. Thus, the applicability of Jurisdictional Delhi High Court , in case of M/s DLF Commercial Project Corporation is not relevant in the present case. As relates to Ground No.2, the CIT (A) has categorically discussed all the aspects whether or not the player has performed in India during the year under consideration, the same is irrelevant after examining the applicability of Clause 2 of Sub Clause 1 of Section 155BBA of the Act and rightly confirmed the Assessment order.
In result, the appeal of the assessee is dismissed.
The order is pronounced in the open court on 09th of March 2016.