2015 (7) TMI 901

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Income-tax Act, 1961 (hereinafter referred to as 'the Act') on payments made to Central Warehousing Corporation, Concor and Continental Warehousing Corporation. 2. The assessee is a private limited company and is engaged in the business of freight forwarding. The assessee filed its return of income for the assessment year 2009-10 on 27.9.2009 declaring total income of Rs. 27,27,050/-. During the course of scrutiny assessment, the Assessing Officer observed that the assessee has made payments to Government agencies, viz., Central Warehousing Corporation, Concor and Continental Warehousing Corporation under the head 'freight charges' without deduction of tax at source. The Assessing Officer accordingly disallowed the paymen....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nd not the amounts already paid. To fortify his alternate submission, the ld. Counsel draws support from the decision of the Tribunal in the case of Merilyn Shipping and Transports v. Addl. CIT reported as 16 ITR(Trib) 1 (Visakhapatnam)(SB). 4. Shri S. Das Gupta, representing the Department vehemently supported the impugned order. The ld. DR submitted that the amount paid by the assessee to Central Warehousing Corporation, Concor and Continental Warehousing Corporation or other such agencies is rent and, therefore, the assessee was liable to deduct tax at source under sec.194-I of the Act. On the alternate submission made by the assessee, with regard to disallowance under sec.40(a)(ia) on the amounts paid or payable, the ld. DR placed re....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ent is a payment for the use of land or/and building under any lease, tenancy or other arrangement/agreement. In the instant case, undisputedly, the assessee is using the building premises of CFS against payment. In our considered view, the said payment is nothing but a rent for the use of premises. As soon as goods are moved into the CFS premises for inspection, the assessee is liable for payment for use of premises. The assessee may not be storing goods in CFS premises but is using the same for other purposes. It is a well settled law that in a taxing statute the principle of strict interpretation applies. The term rent has to be understood and interpreted in the way it is used in the section. The meaning of the term cannot be narrowed....