HEMA MARINE SERVICES P. LTD,MUMBAI vs. ITO WD 6(3)(4), MUMBAI

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ITA 1439/MUM/2013Status: DisposedITAT Mumbai11 December 2015AY 2005-064 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee failed to rebut the findings that it was liable to deduct TDS on freight payments made to a foreign shipping company. Consequently, the disallowance under Section 40(a)(ia) was confirmed.

What were the facts?

The assessee company, engaged in freight forwarding, had its assessment completed with a disallowance for non-deduction of TDS on freight payments. The CIT(A) initially granted relief, but the ITAT set aside the issue for fresh examination. In the second round, the CIT(A) dismissed the assessee's appeal.

What were the issues?

Whether TDS provisions are applicable to freight payments made to foreign shipping companies and if failure to deduct TDS attracts disallowance.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “H”, MUMBAI

Before: SHRI JASON P. BOAZ (AM) & SHRI AMIT SHUKLA (JM)

For Appellant: Shri. None
For Respondent: Shri. K. Mohan Das
Hearing: 10/12/2015Pronounced: 11/12/2015

This appeal by the assessee is directed against the order of the CIT(Appeals)-12, Mumbai dt. 01/11/2012 for Asst. year 2005-06.

2.

The facts of the case, briefly, are as under:- 2.1 The assessee a company engaged in freight forwarding and Agency Services, filed its return for Asst. year 2005-06 on 24/10/2005 declaring total income of Rs. 13,61,176/-. The assessment was completed u/s 143(3) of the Income Tax Act,1961 (in short ‘the Act’), wherein the income of the assessee was determined at Rs. 1,26,55,950/-, inter-alia, making disallowance of Rs. 99,31,847/- u/s 40(a)(ia) of the Act for non deduction of TDS. On appeal, the CIT(A) allowed the assessee relief of Rs. 82,61,647/-. On further appeal by Revenue, the co-ordinate bench of the ITAT, Mumbai Bench in its order in dt. 03/03/2010 set aside to the file of the Assessing Officer (‘AO’) the issue on which the Ld. CIT(A) had allowed relief to the assessee for fresh examination and adjudication after allowing the assessee opportunity to furnish details in this regard. 2.2 In the second round, pursuant to the direction in the Tribunal’s order, the assessment was completed u/s 143(3) r.w.s. 254 of the Act, wherein, the assessee’s income was determined Rs. 1,02,37,180/- in view of the disallowance of at Rs. 82,61,647/- u/s 40(a)(ia) of the Act for non deduction of tax. On appeal, the CIT(A)-12, Mumbai dismissed the assessee’s appeal vide order dt. 01/11/2012.

3.

Aggrieved by the order of the CIT(A)-12, Mumbai dt. 01/11/2012 for Asst. year 2005-06, the assessee has preferred this appeal before us raising the following grounds:-

1 “On the facts and in the circumstances of the case, the Learned erred in confirming the addition of Rs. 82,61,647/- made by the A.O u/s 40(a)(ia), by holding that the amount represented freight payment on which TDS provisions are applicable and ignoring the facts that Income of the foreign shipping company (NDS) is not assessable in India and thus, TDS provisions are not applicable for such payments.

2. The appellant prays that the order of Learned CIT(A) on the above grounds is not bases on facts and legal position and thus, to be set aside.

3. The appellant craves, leave to add/amend or alter any ground or add a new ground which may be necessary.”)

4.

After various opportunities being given to the assessee, the Ld. AR for the assessee appeared only once on 02/09/2015 and sought adjournment of the hearing. In the subsequent three

hearings, again none appeared on behalf of the assessee. Even RPAD letter sent was returned back. In these circumstances, we proceed to dispose off the appeal with the help of the Ld DR and the material on record.

5. After considering the submissions made by the Ld DR for revenue and the material on record, we find that the assessee has been unable to rebut the findings of the authorities below that it was liable to deduct tax at source on the amount of Rs. 82,61,647/- remitted to the principal, Nile Dutch Africa Lines (‘NDL’) and failure to do so attracted the disallowance of the same in accordance with the provisions of Section 40(a)(ia) of the Act. Finding no infirmity in the impugned order of the Ld CIT(A), we do not see any reason to deviate from the finding as recorded by the Ld CIT(A) and accordingly confirm the same.

6.

In the result, the assesses appeal for Asst. year 2005-06 is Dismissed.

Order pronounced in the open court on December 11th, 2015

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