Freight Connection India P.Ltd, Mumbai vs Department Of Income Tax

आयकर अपीलीय अधिकरण, मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES 'F' MUMBAI सर्वश्री आय.पी. बंसल, न्यायिक सदस्य एवं श्री राजेन्द्र, , लेखा सदस्य के समक्ष BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI RAJENDRA , ACCOUNTANT MEMBER

ITA NO.4805/MUM/2013(A.Y. 2009-10)

The DCIT 1(1), Room No.579, Aaykar Bhavan, MK Road, Mumbai - 400020 (Appellant )

Vs. M/s. Freight Connection India Pvt. Ltd., 3rd Floor, 3C, Runwal & Omkar Esquare, Sion-Chunnabhatti Junction, Sion Trombay Road, Sion(E), Mumbai 400 022. PAN: AAACF2188H (Respondent)

Appellant by : Shri Pawan Kumar Beerla Respondent by : Shri Amit Ajmera

Date of hearing 24/03/2015 Date of pronouncement 24/03/2015

ORDER

PER I.P.BANSAL, J.M:

This is an appeal filed by the Revenue and it is directed against order passed by Ld. CIT(A)-I, Mumbai dated 18/03/2013 for assessment year 2009-10. Grounds of appeal read as under:

"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition u/s. 40(a)(ia) r.w.s. 194C amounting to Rs.53,56,395/- being payment of commission made without deduction of TDS."

2. The assessee is a Private Limited Company engaged in the business of shipping, logistic and acts as shipping agent for various foreign principals. During the course of proceedings it was noted by the AO that assessee paid to the Port Agents in its capacity as an agent, therefore, AO being of the view that assessee is required to deduct tax at source under section 194C of the Income Tax Act, 1961(the Act), required the assessee to explain as to why TDS was not deducted out of such payments. The assessee submitted that it obligated by itself foreign principal to collect freight and other charges collected by sub-agent on behalf of foreign principals and it was further submitted that assessee is not obligated to pay commission to these sub-agents, therefore, there is no obligation to deduct tax. However, AO did not accept such submissions of the assessee and disallowed a sum of Rs.57,56,395/- under section 40(a)(ia) of the Act. Ld. CIT(A) has granted relief to the assessee on the basis of appellate order of Ld. CIT(A) in the case of the assessee for A.Y 2007-08, wherein it was held that AO did not make out a case that assessee company and sub-agent enjoyed a principal and agent relationship and thus, addition was deleted. The Revenue is aggrieved by the order of Ld. CIT(A) and has filed aforementioned grounds of appeal.

3. At the outset, it was submitted by Ld. AR that the issue raised by the Revenue in the present appeal is covered in favour of the assessee by the order of the Tribunal in case of assessee itself in relation to A.Y 2007-08. Reference in this regard was made to the decision of ITAT dated 8/4/2014 in ITA No.3642/Mum/2011. Copy of the said order was placed on our record and was also given to Ld. DR. Ld. DR after going through the order did not contradict the contention of the assessee that the issue is covered by the aforementioned order of the Tribunal.

4. In this view of the situation, after hearing both the parties we hold that Ld. CIT(A) did not commit any error in allowing the impugned relief to the assessee as the issue is covered by the decision of Tribunal in case of assessee itself for A.Y 2007-08. The relevant observations of the Tribunal from the said order is reproduced below:

"6. We have carefully considered the rival submissions. As could be noticed from the order passed by learned CIT(A), the agreement between the foreign principal and the assessee as well as job description vis-à-vis sub-agent was considered in details for coming to the conclusion that the foreign principals were responsible for payment to the port agents and the assessee is merely a conduit and therefore it cannot be treated as sub-agent or principal in its own right. Revenue could not controvert the findings of learned CIT(A). Under these circumstances, we do not find any infirmity in the order passed by learned CIT(A) and accordingly dismiss the appeal filed by the Revenue. Pronounced accordingly.

5. Accordingly, the appeal filed by the Revenue is dismissed.

Order pronounced in the open Court on 24/03/2015 आदेश की घोषणा खुले न्यायालय में 24/03/2015 को की गई । Sd/- Sd/- (राजेन्द्र, /RAJENDRA ) (आय.पी. बंसल / I.P. BANSAL) लेखा सदस्य /ACCOUNTANT MEMBER न्यायिक सदस्य / JUDICIAL MEMBER मुंबई Mumbai; दिनांक Dated 24/03/2015

आदेश की प्रतिलिपि अग्रेषित/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5.

विभागीय प्रतिनिधि, आयकर अपीलीय अधिकरण, मुंबई / DR, ITAT, Mumbai

6. गार्ड फाईल / Guard file.

आदेशानुसार/ BY ORDER, सत्यापित प्रति //True Copy//

उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अधिकरण, मुंबई / ITAT, Mumbai व.नि.स./Vm, Sr. PS

Details Date Initials Designation 1 Draft dictated on 24/03/2015

Sr.PS/PS 2 Draft Placed before author 24/03/2015

Sr.PS/PS 3 Draft proposed & placed before the Second Member

JM/AM 4 Draft discussed/approved by Second Member

JM/AM 5. Approved Draft comes to the Sr.PS/PS

Sr.PS/PS 6. Kept for pronouncement on

Sr.PS/PS 7. File sent to the Bench Clerk

Sr.PS/PS 8 Date on which the file goes to the Head clerk

9 Date of Dispatch of order

PAGE 4 ITA NO.4805/MUM/2013(A.Y. 2009-10)