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2024 (6) TMI 1288 - AT - Income TaxIssues Involved: 1. Deletion of addition towards prior period expenses. 2. Disallowance of demurrage charges under Section 40(a)(ia) of the Income Tax Act. 3. Non-granting of TDS credit. 4. Charging of interest under Section 234C of the Income Tax Act. Issue-wise Detailed Analysis: 1. Deletion of Addition Towards Prior Period Expenses: The Revenue appealed against the deletion of additions made by the Assessing Officer (AO) towards prior period expenses for various assessment years (AYs). The AO had disallowed these expenses on the grounds that they did not pertain to the year under consideration. The CIT(A)-NFAC, however, allowed the expenses based on precedents set by the ITAT, Visakhapatnam Bench, in the assessee's own case for AYs 2002-03, 2007-08, and 2015-16, where it was held that such expenses, if crystallized during the year under consideration, are allowable. The Tribunal upheld the CIT(A)-NFAC's decision, emphasizing the principle of consistency and the fact that prior period income was also accepted by the AO. 2. Disallowance of Demurrage Charges Under Section 40(a)(ia): The AO disallowed demurrage charges under Section 40(a)(ia) on the grounds that they were in the nature of ground rent, attracting the provisions of Section 194I, which requires tax deduction at source (TDS). The CIT(A)-NFAC allowed the expenses, relying on the ITAT's previous rulings. The Tribunal noted that the demurrage charges were payments made to foreign shipping companies in foreign currency, and as per CBDT Circular No. 723, dated 19/9/1995, such payments are not subject to TDS under Sections 194C and 195. Therefore, invoking Section 194I was deemed invalid, and the Tribunal upheld the CIT(A)-NFAC's decision. 3. Non-granting of TDS Credit: The assessee's appeal involved the non-granting of TDS credit amounting to Rs. 9,08,06,937/-, which was denied as it was not reflected in Form-26AS. The Tribunal referred to CBDT Circular No. 5/2013, which allows TDS credit based on original Form-16A even if not reflected in Form-26AS. The Tribunal remitted the matter to the AO, directing verification of the original Form-16A and granting of TDS credit if found genuine. 4. Charging of Interest Under Section 234C: The assessee contested the charging of interest under Section 234C, arguing that the advance tax liability arose due to a restructuring package granted after the due date for advance tax payment. The Tribunal noted that there is no provision in the Income Tax Act for exemption from interest under Section 234C and upheld the CIT(A)-NFAC's decision, rejecting the assessee's plea for waiver of interest. Conclusion: The Tribunal dismissed the Revenue's appeals for the AYs 2009-10, 2011-12, 2012-13, 2013-14, and 2014-15, upholding the CIT(A)-NFAC's decisions on prior period expenses and demurrage charges. The cross objections raised by the assessee were dismissed as infructuous. The assessee's appeal was partly allowed for statistical purposes, remitting the issue of TDS credit to the AO for verification. The Tribunal upheld the charging of interest under Section 234C, finding no provision for waiver in the Act.
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