TaxTMI 
TaxTMI 
2016 (11) TMI 529
X X X X Extracts X X X X
X X X X Extracts X X X X
....ncome tax Act, 1961 (hereinafter referred to as the "Act") for AY 2008-09 vide his order dated 28.12.2010. For the sake of brevity, we dispose of both the appeals by this consolidated order. 2. First we take up assessee's appeal. The only issue involved in this appeal of assessee is with regard to the disallowance of Rs. 14,93,044/- towards freight expenses by the AO u/s. 40(a)(ia) of the Act. 2.1. The AO observed that the assessee has paid freight expenses of Rs. 14,93,044/- without deduction of tax at source and accordingly disallowed the same u/s. 40(a)(ia) of the act. Before the Ld. CIT(A), the assessee produced all the details and the same were subjected to remand proceedings and the ld AO gave a general comment in his remand report ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....is justified in deleting the disallowance made u/s. 40(a)(ia) of the Act in respect of - (a) Payments made to Port Management Board - Rs. 17,29,970/- (b) Stevedoring charges - Rs. 5,08,277/- (c) Freight charges - Rs. 14,93,044/- (d) Payment made to Indian Registrar of Shipping - Rs. 3,52,726/- The AO observed that the aforesaid payments were made without deduction of tax at source and accordingly invoked the provisions of section 40(a)(ia) of the Act. The Ld. CIT(A) deleted the disallowance on the ground that the payments were made before the end of the previous year and accordingly by placing reliance on the Special Bench decision in the case of Merilyn Shipping & Transport Ltd., supra held that the provisions of section 40(a)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of which he placed copies of invoices for the same issued by Port Management Board, Anadaman & Nicobar Islands, Port Blair. He argued that in respect of payments made towards stevedoring charges, no finding has been given by the ld AO in his assessment order as to how the subject mentioned expenditure would fall under the purview of deduction of tax at source. He also submitted the details of stevedoring charges paid to various parties throughout the year including the relevant ledger account which he fairly stated that the same may kindly be directed to be verified by the ld AO and decide the matter accordingly. The Ld. DR also fairly conceded for setting aside of this issue to the file of the Ld. AO. In respect of payments made to Indian....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act would be applicable even if amounts were paid before the end of the previous year. 3.4. In respect of payments made to Port Management Board in the sum of Rs. 17,29,970/-, we are convinced on verification of the invoices given by Port Management Board that the said payment is made towards supply of fresh water to the ships. Hence, the same does not fall under the ambit of deduction of tax at source under any of the provisions of the Act. Hence, disallowance made u/s. 40(a)(ia) of the Act to that effect is deleted. 3.5. In respect of payments made in the sum of Rs. 50,82,771/- towards stevedoring charges, we find that the ld AO had not given any finding in his order as to how the subject mentioned expenditure would fall under t....