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of <h1>Tax Tribunal remands TDS liability on foreign shipping payments, upholds relief based on Circular.</h1> <h3>Ultimo Logistics Private Limited Versus Principal Commissioner Of Income Tax-1, Kolkata</h3> Ultimo Logistics Private Limited Versus Principal Commissioner Of Income Tax-1, Kolkata - TMI Issues involved:1. Liability to deduct tax at source on payments made to foreign shipping companies and/or their agents assessed under section 172 of the Income Tax Act, 1961.2. Binding nature of Circular No. 723 dated September 19, 1995 on income tax authorities regarding tax deduction at source for foreign shipping companies and/or their agents.3. Lack of examination by the Commissioner of Income Tax (Appeals) and arbitrary findings by the Income Tax Appellate Tribunal.4. Validity of the order passed by the Commissioner of Income Tax (Appeals) in granting relief to the assessee in relation to certain disallowances concerning non-resident shipping lines.Issue 1: Liability to deduct tax at source on payments to foreign shipping companies and/or their agents assessed under section 172 of the Income Tax Act, 1961The appeal questioned the liability to deduct tax at source on payments to foreign shipping companies and/or their agents assessed under section 172 of the Income Tax Act, 1961. The Tribunal remanded the matter to the Assessing Officer to consider the correctness of the order passed by the Commissioner of Income Tax (Appeals) regarding certain disallowances concerning non-resident shipping lines. The Tribunal found that the CIT(A) did not provide detailed or factual findings on the payees, leading to a remand for further examination.Issue 2: Binding nature of Circular No. 723 dated September 19, 1995 on income tax authoritiesThe appeal raised the question of whether Circular No. 723 dated September 19, 1995 is binding on income tax authorities regarding tax deduction at source for foreign shipping companies and/or their agents. The CIT(A) granted relief to the assessee in respect of payments made to Hanjin Shipping Co. Ltd. and Maersk Line India Pvt. Ltd. based on specific orders and invoices indicating that no tax deduction was necessary as per the circular. The Tribunal upheld the relief granted by the CIT(A) for these companies.Issue 3: Lack of examination by the Commissioner of Income Tax (Appeals) and arbitrary findings by the Income Tax Appellate TribunalThe issue of lack of examination by the Commissioner of Income Tax (Appeals) and arbitrary findings by the Income Tax Appellate Tribunal was raised. The Tribunal found that the CIT(A) did not provide sufficient discussion while granting relief to the assessee in relation to payments made to MSC Agencies Pvt. Ltd., Samudera Shipping Line Pvt. Ltd., and Overseas Container Line Ltd. Consequently, the matter was remanded to the Assessing Officer for fresh consideration specifically for these three companies.Issue 4: Validity of the order passed by the Commissioner of Income Tax (Appeals) in granting reliefThe appeal questioned the validity of the order passed by the Commissioner of Income Tax (Appeals) in granting relief to the assessee in relation to certain disallowances concerning non-resident shipping lines. The CIT(A) provided detailed reasoning for granting relief to Hanjin Shipping Co. Ltd. and Maersk Line India Pvt. Ltd. based on specific orders and invoices indicating no tax deduction was required. The Tribunal upheld the relief granted for these companies and remanded the matter for further consideration only in relation to payments made to MSC Agencies Pvt. Ltd., Samudera Shipping Line Pvt. Ltd., and Overseas Container Line Ltd.
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