2018 (2) TMI 2037

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....erred to as "the Act") dated 13/03/2014 relevant to Assessment Year (AY) 2011-12. 2. The captioned appeal involves solitary issue towards applicability of section 195 and consequently section 40(a)(i) towards foreign remittances to non-residents aggregating to Rs. 33,65,658/- towards freight charges and cargo handling services (including for inspection and logistics service charges). In the course of assessment proceedings under s.143(3) of the Act, it was observed by the Assessing Officer (AO) that the aforesaid payments towards expenses incurred have been made without deduction of tax at source in terms of section 195 of the Act. It was claimed by the assessee that income-tax is not deductible on the aforesaid payments to non-residents....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on these payments of Rs. 33,65,658/- which was made to the foreign parties on account of freight charges and cargo handling charges. The AO has referred to section 195 r.w.s. 40(a)(i) of the Act in his assessment order and has held that amount of foreign remittances of Rs. 33,65,658/- without TDS to non-residence was disallowable. As per the AO the circular quoted by the appellant during the course of appellate proceedings namely 723 dated 19/09/1995 was related with the provisions of section 172 which were related with the, mode of levy and recovery of tax in case of any ship belonging to or chartered by a non-residence, which carries passengers, live stock, mail or goods shipped at a port in India. In view of this fact the AO disallowed t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed reliance on decisions of Hon'ble ITAT, Delhi in the case of DCIT, Circle-3(1), New Delhi v. Chandabh Impex (P.) Ltd. [(2013) 40 taxmann.com 310 and on decision of Hon'ble ITAT, Mumbai in the case of UPS SCS (Asia) Limited v. ADIT (International Taxation)-2(2) [(2012) 18 taxmann.com 302. The Hon'ble ITAT, Delhi in the case of DCIT, Circle-3(1), New Delhi v. Chandabh Impex (P.) Ltd. has held that where assessee paid freight charges to foreign parties outside India, the income did not accrue or arise in India and therefore the assessee was not liable to deduct tax at source while making said payments. Similar view is held by Hon'ble ITAT, Mumbai in the above case of DCIT, Circle-3(1), New Delhi v. Chandabh Impex (P.) Ltd. In....