TaxTMI 
TaxTMI 
2014 (10) TMI 499
X X X X Extracts X X X X
X X X X Extracts X X X X
....ances of the case and in law not appreciating the fact that cargo handling charges to be taxed u/s 194J @ 5% instead of 194 @ 2%. ii) The Ld CIT (A) has erred on the facts and circumstances of the case and law in not appreciating the fact that cargo handling requires highly mechanized machines and skilled and technical competent persons. iii) The Ld CIT (A) on the facts and in the circumstances of the case and in law in not appreciating the fact that payment made under cargo handling charges clearly falls within the purview of section 194J and fees for technical services is liable for deduction u/s 194J of the Act. iv) The Ld CIT (A) has erred on the facts and circumstances of the case and in law deleting the demand of Rs. 3,03,930/- without property appreciating the factual & legal matrix of the case as clearly brought out by the AO in order u/s 201(1) & 201(1A) of the Act." 3. At the outset, Shri Vijay Mehta, Ld Counsel for the assessee brought our attention to the above grounds and mentioned that the only issue raised by the Revenue in its grounds is whether the Cargo Handling Charges (CHC) incurred by the assessee are liable for deduction at source as per provisions....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rovisions of section 194C are applicable to the said payments made by the assessee. Accordingly, CIT (A) directed the AO to delete the demand of Rs. 3,03,930/- with regard to CHC. Aggrieved, Revenue is in appeal before the Tribunal by raising the above mentioned grounds. 4. During the proceedings before us, Ld Counsel for the assessee heavily relied on the order of the CIT (A). Further, Ld Counsel also filed a chart showing the ground wise remarks and mentioned that an identical issue was adjudicated and decided by the ITAT in favour of the assessee. In this regard, he filed copies of the orders of the Tribunal in the cases of (i) Glaxso Smithkline Consumer Healthcare Ltd [2007] 12 SOT 221 (Delhi); (ii) Merchant Shipping Services Pvt Ltd vide ITA No.192/M/2010 and (iii) Glaxo Smithkline Pharmaceuticals Ltd [ITAT, Pune] 48 SOT 643. Ld Counsel also mentioned that similar issue was raised by the Revenue for the AY 2008-2009 and the CIT (A) granted relief to the assessee by deleting the demand of tax u/s 201(1) in respect of cargo handling charges vide his order dated 30.4.2002 (copy of the order of the CIT (A) was placed on record). 5. On the other hand, Ld DR dutifully, relied ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the terms relating to services to be rendered by C&F Agents. We found that the C&F Agents was required to store, dispose, deliver or redeliver goods as may be determined and notified to such C&F Agents by the assessee. The C&F Agents was required to store the goods by the assessee with all care, prudence and responsibility so that such goods are free from risks as theft, pilferage and damages. He shall have full responsibility in respect of clearing consignment, loading/unloading, carriage, cartage to and for the warehouse and godown of the agents, staking or storing. He shall put such mark or marks in the warehouse to distinguish the goods of the assessee from the goods that such agents may receive from any other person. He shall indemnify the assessee against any loss in respect of the goods in its custody. Furthermore, the C&F Agents undertake to deliver the goods or consignment to such persons or parties as nominated by the assessee, maintain and render proper account of goods or consignments received, stored, and delivered periodically and submit such statement to the assessee from time to time. 5. We also found that C&F Agents was liable for all damages, pilferage and othe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ervices (including the provisions of services of technical or other personnel) but does not include consideration for any construction, assembly, mining or like project undertaken by the recipient or consideration which would be income of the recipient chargeable under the head "Salaries"." 7. Thus, it is crystal clear from the provisions of section 194J that services of the agents are neither professional services nor technical services. Such services are also clearly not in the nature of technical, consultancy or managerial services, therefore, tax in respect of these services are not to be deductible under section 194J of the Act. C.B.D.T. in its Circular No. 720, dated 30-8-1995 had also provided that various provisions of Chapter XVII relating to deduction of tax at sources are mutually exclusive and that Chapter XVII deals with a particular kind of payment to the exclusion of all other sections in this Chapter. Thus, any payment of any sum shall be liable for deduction of tax only under one section, therefore, payment is also liable for tax deduction only under one section, as warranted by the nature of services stipulated therein. Combined reading of provisions of section....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le to the payments in respect of Cargo Handling Charges. Thus, the demand of tax under section 201(1) of the Act at Rs. 3,03,930/- in respect of Cargo Handling Charges is hereby directed to be deleted." 8. From the above, we find that while deciding the issue of whether the cargo handling charges paid by the assesssee attracts the provisions of section 194C or 194J, the CIT (A) has rightly adjudicated the issue by following the earlier year's orders of the Revenue Authorities as well as the order of the ITAT, Delhi in the case of Glaxo Smithkline Consumer Healthcare Ltd (supra). Considering the settled position of the issue and respectfully following the order of the ITAT, Delhi Bench, we of the opinion that the decision taken by the CIT (A) in deleting the demand of tax u/s 201(1) of the Act in respect of Cargo Handling Charges is fair and reasonable and it does not call for any interference. Accordingly, grounds no.(i) to (iv) raised by the Revenue are dismissed. 9. In the result, appeal of the Revenue is dismissed. ITA No.4636/M/2012 (AY 2009-2010) 10. This appeal filed by the Revenue on 9.7.2012 is against the order of the CIT (A)-14, Mumbai dated 30.4.2012. In ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... adjudication of the issue of interest charges u/s 201(1A) becomes academic. Accordingly, grounds raised by the Revenue in the instant appeal are dismissed as academic. 12. In the result, appeal of the Revenue is dismissed. ITA No.5114/M/2012 (AY 2010-2011) 13. This appeal filed by the Revenue on 10.8.2012 is against the order of the CIT (A)-14, Mumbai 10.5.2012 for the assessment year 2010-11. In this appeal, Revenue raised the following grounds which read as under: "i) The Ld CIT (A) has erred on facts and circumstances of the case and in law in by not treating Passenger Service Fees (PSF) as 'Rent' as defined under section 194I of the Act as the same is paid for the use of Airport Premises, various equipment installed and various other facilities provided to the passengers. ii) The Ld CIT (A) has erred on facts and circumstances of the case and in law by deleting short deduction of Rs. 30,77,571/-, without appreciating the fact that the 'Passenger Service Fee' is nothing but 'Rent' charged from the passengers to use the Airport Premises, various equipment installed and various other facilities provided to the passengers and paid to the Airp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erused the orders of the Revenue Authorities as well as the cited order of the Tribunal in the case of Jet Airways (India) Ltd (supra), dated 23.10.2013. On perusal of the said order of the Tribunal, we find the paras 12 to 14 are relevant in this regard and the same are reproduced here under: "12. We have carefully considered the rival submissions and perused the orders of the authorities below and the relevant material evidence brought on record. Let us first see the cause of PSF, cause lies in Rule 88 of the Indian Aircraft Rules, 1937, which provides as under :- "the licensee is entitled to collect fees to be called as Passengers Services Fees(PSF) from the embarking passengers at such rate as the Central Government may specify and is also liable to pay for security component to any security agency designated by the Central Government for providing the security services" A perusal of the aforementioned rule clearly shows that it is a statutory liability for every licensee to collect PSF. Since it is a statutory liability and the meaning given by the statute has to be considered and in this case the Indian Aircraft Rules, 1937 has used the term "Fees", therefore, same m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....v. Singapore Airlines Ltd. [2012] 209 Taxman 581/24 taxmann.com 200. 14. It would not be out of place to consider the CBDT Circular No.1/2008, dated 10th January, 2008 relating to the clarification regarding the applicability of provisions of Section 194-I of the Act to payments made by the customers on account of cooling charges to the cold storage owners, wherein the CBDT had the occasion to consider the representations in respect of the issue, whether the customer hires the building, plant and machineries etc., without packages for reservation for a required period are kept in cold storage after paying cooling charges. The CBDT, thus, clarified that the customer is also not given any right to use any demarcated space/place or the machinery of the cold storage and thus does not become a tenant. Therefore, the provisions of 194-I is not applicable to the cooling charges paid by the customers of the cold storage. Applying the same analogy, the PSF charges paid by the assessee on behalf of its customers, do not attract the provisions of Section 194-I of the Act." 17. Further, we have also perused the order of the CIT (A) in general and para 4.3 in particular. On perusal of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ger Service Fees (PSF) as 'Rent' as defined under section 194I of the Act as the same is paid for the use of Airport Premises, various equipment installed and various other facilities provided to the passengers. ii) The Ld CIT (A) has erred on facts and circumstances of the case and in law by deleting short deduction of Rs. 76,24,127/- without appreciating the fact that the 'Passenger Service Fee' is nothing but 'Rent' charged from the passengers to use the Airport Premises, various equipment installed and various other facilities provided to the passengers and paid to the Airport Operator. iii) The Ld CIT (A) has erred on facts and circumstances of the case and in law by deleting short deduction of Rs. 79,86,488/- without appreciating the fact that cargo handling charges' are 'Fees for Professional or Technical Services' in nature and covered u/s 194J of the Act and not of the nature of 'Contract' covered under section 194C of the Act. iv) The Ld CIT (A) has erred on the facts and circumstances of the case and in law by not appreciating the fact that cargo handling requires technically competent and skilled persons to handle hig....