TaxTMI 
TaxTMI 
2013 (10) TMI 1414
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....deducted TDS on a payment of Rs. 7,096/- to a shipper based out of Honk Kong with whom our country does not have a DTAA. 4) For this and other grounds that may be urged at the time of hearing, it is prayed that the order of learned CIT (A) be cancelled and that of the Assessing Officer be restored. 2. Ground nos. 1 and 4 are general in nature and does not require adjudication. 3. Ground no. 2 relates to the deletion of the addition of Rs. 2,14,21,820/- as disallowed by the AO as in the opinion of the AO enduring benefit had arisen and the expenditure was capital in nature. The facts relating to this ground are that during the course of assessment proceedings, the AO noted that the Assessee had incurred an expenditure of Rs. 2,14,21,820/- on account of afforestation expenses. The payments were made to Dy. Conservator of Forests, Margao, Goa with respect to NPV charges connected to the mines and were in favour of Compensatory Afforestation Fund, Goa. When questioned, the Assessee explained that the Assessee is engaged in mining business. The payment is made under the Forest Conversation Act to Dy. Conservator of Forests, South Goa Division, Government of India, Margao, Goa. It is....
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....n of Hon'ble ITAT, the A.O is directed to allow the expenditure of Rs. 2,14,21,820/- claimed as Afforestation expenses as revenue expenditure and delete the addition made. This Ground of Appeal of the assessee is allowed." 3.1 Before us, the Assessee also relied on the order of this Tribunal in the case of Dr. Prafulla R. Hede vs. CIT (supra). 3.2 On the other hand, the ld. DR vehemently contended that the CIT(A) has not given any finding on merit. The decision of this Tribunal relates to the question whether the assessment order could be said to be erroneous and prejudicial to the interest of revenue u/s 263. It is a settled law that the order cannot be erroneous if AO has taken one of the possible views until and unless the view taken by the AO is unsustainable in law. 3.3 We have heard the rival submissions and carefully considered the same. We noted that the AO has disallowed the expenditure incurred by the Assessee on the plea that the expenditure is a capital expenditure and the benefit of the expenditure has to accrue over a number of years and therefore has to be treated as a capital expenditure. The AO also took the view that the whole expenditure did not accrue during ....
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....n of the Hon'ble Jurisdiction High Court in the case of CIT vs. Orient Goa Co. (P) Ltd., 325 ITR 554 in which the Hon'ble Bombay High Court has held as under : "7. We have given anxious consideration to the submission of the learned Senior Counsel. On reading of the entire judgment of the learned Single Bench, it is not possible for us to countenance the submission of the learned Senior Advocate that the ratio of the Judgment is applicable to the facts of the case on hand. In our view, this Judgment does not help the present respondent, i.e., the assessee. Another Judgment relied on by the learned Senior Advocate Mr. Usgaonkar for the respondent-assessee is in the matter of CBDT v. Chowgule & Co. Ltd. [1991] 192 ITR 40 (Kar.). There the learned Division Bench observed that "The question for consideration is whether demurrage payable to a non-resident owner or charterer of a ship for the delay in loading the ore sold to the foreigner is liable to be taxed under the provisions of the Income-tax Act". We have seen the facts obtaining in that case. In our view, the facts are distinguishable. The ratio of this Judgment also does not help the present assessee, i.e., the respo....
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....n pointed out to us. His observations are in very few lines. We may reproduce the said portion herein below. " 3. We have heard the rival submissions in the light of material placed before us. Assessee claimed deduction of Rs. 1,08,53,980 being the amount of demurrage payable to Mitsui Co. Ltd., Japan. The Assessing Officer opined that since the assessee did not deduct tax at source, as such the case of the assessee falls within the mischief of section 40(a)( i) of the Income-tax Act, 1961". Provisions of section 172 are to apply notwithstanding anything contained in the other provisions of the Act. Therefore, in such cases, the provisions of sections 194C and 195 relating to tax deduction at source, are not applicable. The recovery of tax is to be regulated for voyage undertaken from any port in India by a ship, under the provisions of section 172. In this view, these observations of the learned Vice President of Income-tax Appellate Tribunal have no concern with the factual aspect that it is a case of occasional shipping, pleaded or raised by assessee. There is no dispute about interpretation of section 172 or section 195. Crucial point is as to how section 172 applies to the fac....
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....may notice here the Judgment of the Hon'ble Supreme Court in the matter of Union of India v. Gosalia Shipping (P.) Ltd. [1978] 113 ITR 307. This judgment seems to be the basic judgment which is being referred to by the learned Single Bench of the Karnataka High Court. In that case, Gosalia Shipping (P.) Ltd., a company incorporated under the provisions of the Indian Companies Act, 1956 indulged at the relevant time in business of clearing and forwarding and as steamship agents. Gosalia Shipping (P.) Ltd., had acted as the shipping agent of "Aluminium Company of Canada Limited" which was a non-resident company. That non-resident company had chartered a ship "M.V. Sparto" belonging to a non-resident company called Sparto Compania Naviera of Panama. The said ship called at the port of Betul, Goa on 1-3-1970. On 20-3-1970, the ship had left for Canada. The ship was allowed to leave port of Betul on the basis of guarantee bond, executed by the respondent in favour of the President of India. On 15-4-1970, the First Income-tax Officer, Margao, Goa issued a Demand Notice to the respondent Gosalia Shipping (P.) Ltd. for payment of Rs. 51,000 and odd amount, by way of Income-tax. We have....