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TMI Blog2015 (9) TMI 1670X X X X Extracts X X X X X X X X Extracts X X X X ..... h the principles on the subject. We however, direct the Assessing Officer (AO) to give relief to assessee in case Hon ble Supreme Court also concurs with the opinion expressed by the Hon ble Calcutta High Court. The ground for the time being is considered allowed for statistical purposes. Disallowance of payment of ocean freight - disallowance u/s 40(a)(ia) - Admission of additional evidence - HELD THAT:- Since the additional evidence is required to be examined as both AO and CIT(A) gave contradictory findings, in the interest of justice, we admit the additional evidence and remit the issue to the file of AO to examine the said payments and if the payments are to the agents of foreign shipping liners, we make it clear that amounts cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i, Judicial Member And Shri B. Ramakotaiah, Accountant Member For Assessee : Shri V. Siva Kumar, AR For Revenue : Shri Y. Sesha Srinivas, DR ORDER B. Ramakotaiah, This is an assessee's appeal against the order of Commissioner of Income Tax (Appeals)-IV, Hyderabad dated 30-12-2011. Assessee is aggrieved on three issues, on which CIT(A) did not agree with assessee's contentions and raised as many as five grounds. Ground Nos. 1 & 5 being general in nature, there is no need of any adjudication. We have heard the Ld. Counsel and Ld. DR in detail. 2. Ground No.2 : This ground is pertaining to disallowance of provision for leave encashment of ₹ 11,35,943/- U/s. 43B(f) of the Income Tax Act [Act]. In appeal, Ld. CIT(A) upheld the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not acceptable, disallowed the amount. The application made U/s. 154 by assessee seems to have been not attended to. Ld. CIT(A) also confirmed the disallowance stating that assessee even though submitted the names of the party to whom payments are made are agents of non-resident shipping liners, no evidence could be furnished during the course of appellate proceedings to substantiate this contention. 5. Ld. Counsel submitted that AO also stated that no details were furnished and assessee's contentions were not accepted. Ld. CIT(A) while agreeing that the details of payments to whom they are made were furnished before the AO, but did not acknowledge, even though they were furnished before the CIT(A). In view of this, it was submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Gujarat Reclaim & Rubber Products Ltd., Vs. Addl. CIT [35 Taxmann.com 587 (Mum-Trib)] (supra), Co-ordinate Bench of the Mumbai ITAT has held that since income of non-resident ship companies was separately taxed U/s. 172, assessee was not required to deduct tax at source on ocean freight expenses paid or payable to non-resident shipping company, thus, disallowance U/s. 40(a)(ia) does not arise. Similar view was expressed in the other cases also relied on by assessee. Therefore, in case the payments are made to local shipping agents of non-resident ship liners, then AO is directed to exclude the amount as provisions of Section 40(a)(ia) does not apply to the payments. With these directions, ground is considered allowed for statistical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pheld the disallowance on the following three parties as under: i. Shanti traders - ₹ 1,69,627/- ii. Syenrgy Textiles Ltd., - ₹ 3,56,220/- iii. Vamshi enterprises - ₹ 1,07,360/- 10. It was the contention of Ld. Counsel that AO has disallowed the amounts as under and Ld. CIT(A) wrongly confirmed higher amounts. The amounts disallowed by the AO were submitted as under: i. Shanti traders - ₹ 1,10,202/- ii. Syenrgy Textiles Ltd., - ₹ 3,45,202/- iii. Vamshi enterprises - ₹ 33,422/- 11. Subject to verification of the actual disallowance to be made, it was submitted that CIT(A) should have appreciated the claims made with reference to the market practice in respect of consignment sales wher ..... X X X X Extracts X X X X X X X X Extracts X X X X
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