TaxTMI 
TaxTMI 
2020 (12) TMI 543
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....se in confirming AO's act of holding that the appellant is required to pay Rs. 2,32,319/- being aggregate of sum deductible u/s. 195 r.w.s. 201(1) alongwith interest u/s. 201(1A) of the Act. 2. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO of holding that s. 195 of the Act is applicable to the foreign remittance of Rs. 56,70,000/- made towards demurrage charges. 3. Both the lower authorities failed to appreciate that the remittance is not at all chargeable to tax in India and therefore there was no obligation to deduct tax at source. Accordingly, there was no question of invoking provisions of S. 201(1) and S. 201(1A) of the Act. 4. The learned CIT(A) has consequently erred bo....
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....stated that provision of section 201(1) and section 201(1A) r.w.s. 195 of the Act are not applicable in respect of payment of demurrage charges to Wilmar Trading Pvt. Ltd. as the same was the reimbursement of expenses to the supplier of the goods. The assessee has also placed reliance on the various judicial pronouncements elaborated in the order of the AO at page no. 3 and 4 of the assessment order. The assessee has also submitted that vide circular no. 723 dated 19th Sep, 1995, CBDT has specifically clarified that provision of section 195 are not applicable to payment made by resident to non-resident of shipping line or any other person and the provisions of section 194C and 195 relating to tax deduction at source are not applicable. The ....
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....o Gujarat Ltd. vs. ACIT (2018) 92 taxman.com 27. The ld. counsel has further submitted that the payment was reimbursement of demurrage charges on which no tax is required to be deducted and placed reliance on the decision of Hon'ble Gujarat High Court in the case of CIT Vs. Gujarat Narmada Valley Fertilizer Company Ltd. Tax Appeal No. 315 of 2013. On the other hand, Ld. D.R. has supported the order of lower authorities. 7. Heard both the sides and perused the material on record. The demurrage charge was made to the Wilmar Trading Pvt. Ltd. as reimbursement of the expenses made by it on behalf of the assessee to shipping company. The assessee has placed reliance on the CBDT Circular No. 723 : dated 19th Sep, 1995 and submitted that ther....
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....com 315 wherein it is held that there is no obligation cast upon assessee to deduct tax at source u/s. 195 in respect of demurrage charges paid to a non-resident shipping company as such income was liable to be brought to tax u/s. 44B and section 172 of the Act. Similarly, ITAT Ahmedabad in the case of Steelco Gujarat Ltd. vs. ACIT, Baroda (2018) 92 taxman.com 27 has held that as long as ship in respect of which freight payments are made is owned or chartered by non-resident or entity which is where provision of section 172 are applicable, provision of section 195 or 194C cannot be invoked. In the light of the above facts, material and judicial findings, we consider that provision of section 195 are not applicable to the reimbursement of de....