ITO, New Delhi v. M/s Opera Global Pvt. Ltd., New Delhi

ITA 3645/DEL/2011 | 2008-2009
Pronouncement Date: 30-09-2011 | Result: Dismissed

Appeal Details

RSA Number 364520114 RSA 2011
Assessee PAN AAACO7607G
Bench Delhi
Appeal Number ITA 3645/DEL/2011
Duration Of Justice 2 month(s) 4 day(s)
Appellant ITO, New Delhi
Respondent M/s Opera Global Pvt. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 30-09-2011
Date Of Final Hearing 26-09-2011
Next Hearing Date 26-09-2011
Assessment Year 2008-2009
Appeal Filed On 26-07-2011
Judgment Text
ITA NO. 3645/DEL/2011 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI R.P. TOLANI JUDICIAL MEMBER AND SHRI SHAMIM YAHYA ACCOUNTANT MEMBER I.T.A. NO. 3645/DEL/2011 A.Y. : 2008-09 INCOME TAX OFFICER WARD 13(4) ROOM NO. 219 CR BUILDING NEW DELHI VS. M/S OPERA GLOBAL PVT. LTD. 1099 VIKAS KUNJ VIKASPURI NEW DELHI (PAN/GIR NO. : AAACO7607G) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSEESSEE BY : SH. VED JAIN AND SH . V. MOHAN CAS DEPARTMENT BY : SH. R.S. NEGI SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 28.3.2 011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE ISSUE RAISED IS THAT LD. COMMISSIONER OF INCO ME TAX (APPEALS) ERRED IN DELETING THE DISALLOWANCE OF ` 48 61 509/- MADE U/S. 40(A)(IA) IN RESPECT OF FREIGHT ON EXPORT OUTWARD O N WHICH NO TAX WAS DEDUCTED AT SOURCE. 3. IN THIS CASE ASSESSING OFFICER DISALLOWED THE A SSESSEES CLAIM OF ` 48 61 509/- ON ACCOUNT FREIGHT OUTWARD CHARGES U/ S 40(A)(IA) DUE TO NON-DEDUCTION OF TDS ON THE ABOVE PAYMENT MADE BY THE ASSESSEE. ITA NO. 3645/DEL/2011 2 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) IT WAS ARGUED THAT THE PAYMENT HAS BEEN MADE BY THE ASSESSE E ON THE BASIS OF SEPARATE BILLS RAISED BY THE FORWARDING AGENT TO WARDS REIMBURSEMENT OF ACTUAL AND EXACT AMOUNT OF FREIGHT C HARGES PERTAINING TO THE AIRLINES FOR EXPORT OF THE GOODS. IT WAS FURTHER ARGUED THAT THERE IS NO LIABILITY FOR DEDUCTION OF TDS ON T HE ABOVE PAYMENTS U/S 194C. IT WAS FURTHER ARGUED THAT THAT PROVIS ION OF SECTION 40(A)(IA) DOES NOT APPLY TO SUCH PAYMENTS MADE TOWA RDS REIMBURSEMENT OF ACTUAL FREIGHT CHARGES PAID TO THE AIRLINES. ASSESSEE FURTHER RELIED UPON THE CERTAIN CASE LAWS IN THIS R EGARD. ON CONSIDERING THE ISSUE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HELD AS UNDER:- ON CAREFUL EXAMINATION OF THE MATTER I FIND THAT T HE PAYMENTS MADE ON THE BASIS OF SEPARATE BILLS RAISED FOR REIMBURSEMENT OF ACTUAL FREIGHT CHARGES PAID TO AIR LINES ARE NOT COVERED BY THE PROVISIONS OF SECTION 194C READ WITH SECTION 40(A)(IA) OF THE ACT. I ALSO FIND THAT IN THE RELATED CASE OF ITO VS. DR. WILLIAN SCHWABLE INDIA (P) LTD. ( 2005) 3 SOT 71 RELIED UPON BY THE A.R. THE JURISDICTIONAL HIGH COURT HAS HELD THAT THE REIMBURSEMENT OF ACTUAL VEHICLE EX PENSES IS NOT COVERED WITHIN THE AMBIT OF SECTION 194J WH ICH IS AKIN TO THE PROVISIONS OF SECTION 194C. IN THE SA ID ORDER THE HONBLE DELHI HIGH COURT HAS ALSO TAKEN THE SU PPORT OF CBDT CIRCULAR NO. 715 DATED 08.8.1995 AS PER WHICH TDS IS REQUIRED ONLY IN CASES WHERE BILLS ARE RAISED FOR GROSS AMOUNT INCLUSIVE OF PROFESSIONAL FEES AS WELL AS REIMBURSEMENT OF ACTUAL EXPENSES AND ACCORDINGLY NO TDS IS REQUIRED TO BE MADE WHEN BILLS ARE RAISED SEPARAT ELY BY ITA NO. 3645/DEL/2011 3 AGENTS FOR REIMBURSEMENT OF ACTUAL EXPENSE INCURRED BY THEM. THE HONBLE HIGH COURT HAS ALSO OBSERVED TH AT THERE IS NO ELEMENT OF PROFIT INVOLVED IN SUCH BILLS RELA TING TO REIMBURSEMENT OF ACTUAL EXPENSES. THE RATIO OF TH E ABOVE JUDGEMENT IS APPLICABLE TO THE INSTANT CASE. SIMILA R DECISION HAS ALSO BEEN TAKEN BY THE HONBLE ITAT I N A NUMBER OF CASES CITED BY THE LD. AUTHORISED REPRESEN TATIVE. THUS AS PER THE STATUTORY PROVISIONS CONTAINED IN SECTION 194C READ WITH SECTION 40(A)(IA) OF THE ACT AND THE CBDTS CIRCULAR NO. 715 DATED 08.8.1995 AS WELL AS THE JUD ICIAL PRONOUNCEMENTS ON THE SUBJECT THE IMPUGNED DISALLOWANCE OF ` 48 61 509/- CANNOT BE SUSTAINED. ALSO SIMILAR DISALLOWANCE HAS BEEN DELETED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XVIII IN THE CA SE OF APPELLANT VIDE HIS ORDER DATED 03.5.2010 FOR THE A .Y. 2006- 07. THUS LOOKING INTO THE FACTS OF THE CASE AND F OLLOWING THE DECISION OF LD. COMMISSIONER OF INCOME TAX (APPEAL S)- XVIII AS WELL AS THE LAW LAID DOWN IN THE MATTER T HE SAME IS DELETED. 5. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. LD. COUNSEL OF THE ASSESSEE HAS CONTENDED THAT THIS TRIBUNAL IN ITA NO. 3981/DEL/20 10 FOR ASSESSMENT YEAR 2006-07 IN THE CASE ITO VS. M/S ONS CREATIONS PVT. LTD. VIDE ORDER DATED 13/5/2011 HAS CONSIDERED THE IDENTICAL ISSUE AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. ITA NO. 3645/DEL/2011 4 6.1 WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) IS CORRECT IN HOLDING THAT PROVISION OF SECTION 40(A)( IA) DOES NOT APPLY TO SUCH PAYMENTS MADE TOWARDS REIMBURSEMENT OF ACTUAL F REIGHT CHARGES PAID TO THE AIRLINES. IN THIS REGARD RELIANCE OF CASE ITO VS. DR. WILLIAN SCHWABE INDIA (P) LTD. (2005) 3 SOT 71 ALSO RELEVANT AND SUPPORTS THE CASE OF THE ASSESSEE. FURTHER CBDT CIRCULAR NO. 715 DATED 08.8.1995 PROVIDE THAT THE TDS IS REQUIRED TO BE MADE ONLY IN CASES WHERE THE BILLS ARE RAISED FOR GROSS AMOUNT INCLUSIVE OF PROF ESSIONAL FEES AS WELL AS REIMBURSEMENT OF ACTUAL EXPENSES AND ACCORDINGLY NO TDS IS REQUIRED TO BE MADE WHEN BILLS ARE RAISED SEPARATEL Y BY AGENTS FOR REIMBURSEMENT OF ACTUAL EXPENSES INCURRED BY THEM. A CCORDINGLY NO TDS IS REQUIRED TO BE RAISED. THUS WE FIND OURSE LVES IN AGREEMENT WITH THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) THAT DISALLOWANCE OF ` 48 61 509/- CANNOT BE SUSTAINED. ACCORDINGLY WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME T AX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE S TANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/9/2011. SD/- SD/- [ [[ [R.P. TOLANI R.P. TOLANI R.P. TOLANI R.P. TOLANI] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 30/9/2011 SRB COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1.APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR I TAT TRUE COPY BY ORDER ITA NO. 3645/DEL/2011 5 ASSISTANT REGISTRAR ITAT DELHI BENCHES