2014 (4) TMI 314

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....by the assessee on the payments made to various parties. 3. Briefly stated, the assessee, a firm, engaged in the business of export of chemicals, during the year under consideration, had paid Rs.29,08,740/- towards freight and forwarding charges etc to various parties. However, the AO made an addition of Rs.21,04,074/- pertaining to the payments made by the assessee to six various parties. The details of the payments are (i) Rs.10,27,164/- paid to M/s. Afford Logistics Pvt. Ltd, (ii) Rs.2,21,224/- paid to M/s. B.R. Freight System, (iii) Rs.63,240/- paid to Ms/. S.K. International (iv) Rs.1,23,402/- paid to M/s. Samsara Shipping Pvt. Ltd. (v) Rs.4,75,155/- paid to M/s. Seacon Logistical Services and (vi) Rs.3,92,729/- paid to M/s. Sea Rou....

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....d the Ld.CIT(A) has found that only in respect of two parties payment made is above 20,000/- and since the assessee has not deducted TDS on the two payments of Rs.30,550/-, Rs.29,550/-, the addition made by the AO to the extent of Rs.60,100/- has been sustained by the Ld.CIT(A). It is noted that the Ld.CIT(A), by relying on the CBDT circular no. 723 dated 19.09.1995, has deleted the addition made by the AO on account of Ocean Freight charges. As regards the addition of Rs.2,21,224/- made by the AO in respect of the payment made to M/s B.R. Freight System, the agency charges of Rs.5450/- which has been paid by the assessee does not attract the provisions of TDS as the amount is below Rs.20,000/-. As far as payment towards air freight of Rs.2....

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....unal in the case of ITO Vs. Freight System (India) (P) Ltd. [2006 (6) SOT 473 (Del)] wherein it has been held that payment of ocean freight is not liable for tax deduction at source u/s 194(c) in view of provisions of section 172. The same is the case with the inland charges which is covered under subsection 8 of section 172. The Tribunal in the case of DCIT Vs. Hasmukh J. Patel [2012 (49) SOT 197 (Ahd)] has held that the payments made to shipping agents of non residents is nothing but reimbursement of charges which has been clarified by the CBDT circular no. 723 (supra) which states that the provisions of section 172 would apply in such cases and no deduction of taxes required as per section 194(c). Some of the other additions were deleted....