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TMI Blog2020 (7) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... e area of computation of profits from shipping business of non-residents. Thus, there is no overlapping in the areas of operation of these sections. There would, however, be cases where payments are made to shipping agents of non-resident ship-owners or charterers for carriage of passengers etc., shipped at a port in India. Since, the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, provisions of section 172 shall apply and those of sections 194C and 195 will not apply. Addition on difference between the opening balance in the account of M/s Eskay Sales Corporation and in the accounts of the assessee - HELD THAT:- We find that Assessing Officer has made the disallowance simply by holding that the assessee produced ledger account of these expenses which are not open to full verification and hence has disallowed 10% out of various expenses. The Assessing Officer has nowhere pointed out any specific discrepancy in the books of account nor he has rejected the same. In our opinion, the Assessing Officer cannot make ad hoc disallowance. See ASHOK SURANA VERSUS COMMISSIONER OF INCOME-TAX [ 2016 (6) TMI 696 - CALCUTTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lay in filing the appeal have been explained stating that the assessee tied the folder in which the order was kept, with some other files and it got bundled with other records; and that the appeal could be filed only after it was traced, incurring the inordinate delay of thirty six days. It was prayed that the assessee was prevented by reasonable and sufficient cause in not filing the appeal within the prescribed time and therefore, the delay may be condoned and the appeal may be heard on merits. Learned D. R. had no objection to the condonation of delay. Finding the plausible sufficient cause for delay in filing the appeal, we condoned the delay and directed both the parties to argue the case on merits. 3. Ground Nos. 1 to 3 of the appeal relate to the disallowance of ₹ 6,42,437/- for non deduction of tax at source u/s 40(a)(ia) of the Act on payment of ocean freight, made to non-resident shipping companies. The assessee is a proprietary concern and engaged in the business of manufacturing of leather and cotton items. During the year under consideration, the assessee had exported goods and made payment of ₹ 6,42,437/- towards shipping expenses in the nature of freight. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to in clauses (a) to (j) of sub-section (1) to any resident (termed as contractor). It is clear from the section that the area of operation of TDS is confined to payments made to any resident . On the other hand, section 172 operates in the area of computation of profits from shipping business of non-residents. Thus, there is no overlapping in the areas of operation of these sections. 5. There would, however, be cases where payments are made to shipping agents of non-resident ship-owners or charterers for carriage of passengers etc., shipped at a port in India. Since, the agent acts on behalf of the non-resident ship-owner or charterer, he steps into the shoes of the principal. Accordingly, provisions of section 172 shall apply and those of sections 194C and 195 will not apply. ' 5. From the reading of the above circular, it is clear that the disallowance was not required to be made. Accordingly, we delete the disallowance sustained by the CIT(A). 6. Ground No. 4 of the appeal relates to the addition of ₹ 50,250/- made on account of difference between the opening balance in the account of M/s Eskay Sales Corporation and in the accounts of the assessee. Learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incurred expenses on account of telephone. The Assessing Officer disallowed 20 per cent. of the expenditure on the ground that the assessee failed to maintain a call book for monitoring calls and that a part of such calls were for personal and non-business use. The assessee also claimed expenses of the Mumbai office, part of which were supported by internal debit vouchers and claimed general expenses and expenses towards tea and tiffin, supported by debit vouchers. The Assessing Officer, disallowed 20 per cent. of expenses on the ground that they were not verifiable. The Commissioner (Appeals) confirmed this. The Tribunal restricted the disallowance. On appeal: Held, that it was not the case of the Assessing Officer that the assessee was unable to adduce satisfactory evidence that the expenditure was incurred for the purpose of his business. When appropriate evidence was adduced, it was not in the power of the Assessing Officer to arbitrarily disallow any item of expenditure on the ground that the sums were not verifiable. There was no indication as to what step was taken by the Assessing Officer to have those expenses verified. If the Assessing Officer had not taken pains to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid rule itself. This rule was inserted as a result of directions of Hon ble jurisdictional High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein Their Lordships had, inter alia, directed that We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment . In the rule so framed, as a result of these directions, the expression ordinarily has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether the passing of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherever considered appropriate, following the due procedure . The term force majeure has been defined in Black s Law Dictionary, as an event or effect that can be neither anticipated nor controlled When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an ordinary period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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