2013 (9) TMI 1214 - AT - Income Tax

Summary

Issues involved:
The issues involved in this judgment are the addition of clearing charges u/s. 40(a)(ia) of the Income-tax Act and the addition of interest payment u/s. 40(a)(ia) of the Income-tax Act.

Issue 1 - Clearing Charges:
The appellant challenged the addition of clearing charges to the total income u/s. 40(a)(ia) of the Income-tax Act. The Assessing Officer considered the clearing charges under Professional and Technical Services instead of Contractual Services, leading to the addition of Rs. 60,092. However, the Tribunal held that the payment made to the Clearing and Forwarding Agent falls under u/s. 194C, not u/s. 194J, as per the case law precedent. Since the amounts paid were below the threshold limit for A.Y. 2006-07, the assessee was not obligated to deduct tax at source, resulting in the deletion of the addition.

Issue 2 - Interest Payment:
The appellant contested the addition of Rs. 1,83,643 to the total income u/s. 40(a)(ia) of the Income-tax Act due to failure to deduct tax at source on interest payment. The Assessing Officer disallowed the deduction as the Form No. 15G declarations were not filed with the CCIT or CIT within the specified time frame. The Tribunal noted that even though the forms were not submitted to the CCIT or CIT, they were available with the assessee, and the tax was not deducted based on these forms. Relying on precedents, the Tribunal allowed the claim and deleted the addition.

In conclusion, the Tribunal allowed the appeal of the assessee in both issues, leading to the deletion of the additions made by the Assessing Officer.