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TMI Blog2024 (6) TMI 1288X X X X Extracts X X X X X X X X Extracts X X X X ..... i High Court in the case of Additional CIT vs. Jay Engineering Works Limited [ 1978 (2) TMI 94 - DELHI HIGH COURT] TDS u/s 194I - Disallowance u/s. 40(a)(ia) - demurrage charges - AR submitted that these expenditures are in the nature of payment made to shipping companies in foreign currency - HELD THAT:- From the submissions of the Ld. AR, we find that the payment are made to foreign shipping companies as demonstrated by the Ld. AR through the documents which are available. These are in the nature of detention charges paid to foreign shipping companies and therefore the Board Circular No. 723, dated 19/9/1995 is applicable. We therefore are of the view that invoking the provisions of section 194I in the case of the assessee is not valid in law and thereby we reject the grounds No. 4 5 raised by the Revenue on this issue. Denial of TDS credit - claim denied to the assessee since it is not reflecting in Form-26AS of the assessee for the impugned assessment year - HELD THAT:- As the Circular No 5/2013 wherein it was clearly clarified by the CBDT to allow and grant credit for TDS based on the original Form-16A submitted by the assessee even though it is not reflected in the Form-26AS. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 871759(1), dated 23/08/2022 arising out of the order passed u/s. 143(3) of the Income Tax Act, 1961 [ the Act ]. Since the issues raised in all the Revenue s appeals are identical, so also the Cross Objections raised by the assessee are identical, for the sake of convenience, all these appeals are clubbed, heard together and disposed off in this consolidated order. Appeal wise adjudication is given in the following paras of this order. ITA No. 188/Viz/2022 (AY: 2013-14) 2. This appeal filed by the Revenue against the order of the Ld. CIT(A)-NFAC for the AY 2013-14. 3. Briefly stated the facts of the case are that the assessee is Public Sector Undertaking engaged in the business of construction and repairs of ocean-going ships, ship repairs and refitting of submarines, filed its return of income for the AY 2013-14 on 20/09/2013 admitting a loss of Rs. 32,50,35,169/- and claiming a refund of Rs. 3,43,42,010/-. The case was selected for scrutiny under CASS and accordingly statutory notices u/s. 143(2) 142(1) of the Act were issued and served on the assessee calling for information. The assessee s Authorized Representative appeared from time to time and furnished the relevant informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 4. The appellant craves leave to add or delete or amend or substitute any ground of appeal. 5. Grounds No.1 and 4 are general in nature and they need no adjudication. 6. Grounds No.2 3 pertain to the deletion of addition made by the Ld. AO towards prior period expenses of Rs. 8,41,04,723/-. At the outset, the Ld. AR submitted that the issue of prior period expenses has already been considered by the Hon ble ITAT, Visakhapatnam Bench in the assessee s own case for the AY 2002-03 and 2015-16 in favour of the assessee. The Ld. AR submitted copy of the order of the ITAT, Visakhapatnam Bench in the assessee s own case for the AY 2007-08 and 2008-09 (ITA No. 102 103/Vizag/2012), dated 28/07/2015 wherein on the similar issue the Bench has held in favour of the assessee. The Ld. AR therefore pleaded that the order of the Ld. CIT(A)-NFAC be upheld. Per contra, the Ld. Departmental Representative [ Ld. DR ] relied on the order of the Ld. AO. 7. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is an admitted fact that the assessee has incurred the following expenditure pertaining to prior periods: Particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2002-03 in the assessee s own case: 4. Having heard the rival submissions and from a careful perusal of the orders of the authorities below, we find that assessee has offered the prior period income along with the expenditure during the impugned assessment year. The assessing officer has accepted the prior period income in this year but disallowed the prior period expenditure. This action of the assessing officer is not proper as he has to take into the account the status as a whole and not to make a pick and choose. We however, carefully examined the order of the Ld. CIT(A) and we find that the Ld. CIT(A) has adjudicated the issue in the light of judgment of the Delhi High Court in the case of Additional CIT vs. Jay Engineering Works Limited 113 ITR 389. Our attention was also invited to the other judgment of the Delhi High Court in the case of CIT vs. Mobile Pvt Ltd 328 ITR 17 on the impugned proposition of law. Since the CIT(A) has properly adjudicated the issue and we find no infirmity therein, we confirm his order. Following the principle of consistency, we have no hesitation to uphold the order of the Ld. CIT(A)-NFAC thereby dismissing the Grounds 2 3 raised by the Revenue. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses amounting to Rs. 5,62,78,000/- and disallowance u/s. 40(a)(ia) of the Act towards demurrage charges amounting to Rs. 73,31,800/-. Aggrieved by the additions made by the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)-NFAC. 17. On appeal, the Ld. CIT(A)-NFAC considering the submissions made by the assessee s Authorized Representative and following the orders of the ITAT, Visakhapatnam Bench on the issues in the assessee s own case, the Ld.CIT(A)-NFAC partly allowed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A)-NFAC, the Revenue is in appeal before the Tribunal by raising the following grounds of appeal: 1. The order of the Ld. CIT(A) is erroneous both on facts and in law. 2. The Ld. CIT(A) erred in deleting the addition made by the Ld. AO towards prior period expenses of Rs. 5,62,78,000/- though same do not pertains to the year under consideration. 3. The Ld. CIT(A) erred in allowing the claim of prior period expenses even though the AO made a finding that the assessee has not made out a case that the expenditure is allowable in the current year under consideration. 4. The Ld. CIT(A) erred in deleting the addition made by the AO towards demu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the order of the Ld. CIT(A)-NFAC be upheld. 21. Per contra, the Ld. DR heavily placed reliance on the order of the Ld. AO and argued that demurrage charges are in the nature of ground rent payable. He also referred to Explanation to section 194I of the Act wherein any other agreement has been mentioned and hence this agreement for detention of goods amounts to rental charges attracting the provisions of section 194I of the Act. He therefore pleaded that the order of the Ld. AO be upheld. 22. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. From the submissions of the Ld. AR, we find that the payment are made to foreign shipping companies as demonstrated by the Ld. AR through the documents which are available in the paper book at page no. 126. These are in the nature of detention charges paid to foreign shipping companies and therefore the Board Circular No. 723, dated 19/9/1995 is applicable. We therefore are of the view that invoking the provisions of section 194I in the case of the assessee is not valid in law and thereby we reject the grounds No. 4 5 raised by the Revenue on this issue. 23. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Ld. AO towards prior period expenses of Rs. 54,43,79,000/- though same do not pertains to the year under consideration. 3. The Ld. CIT(A) erred in allowing the claim of prior period expenses even though the AO made a finding that the assessee has not made out a case that the expenditure is allowable in the current year under consideration. 4. The Ld. CIT(A) erred in deleting the addition made by the AO towards demurrage charges of Rs. 1,73,000/- u/s. 40(a)(ia) of the Act. 5. The Ld. CIT(A) erred in observing the claim of demurrage charges which are in the nature of ground rent / detention charges raised by the freight forwarders and clearance agents in respect of the space occupied by the goods /materials to be lifted by the assessee and hence the same squarely full under the ambit of section 194I of the Act. 6. For these and other grounds that may be urged at the time of appeal hearing, it is prayed that the disallowance / additions made by the AO be restored. 30. The above grounds of appeal raised by the Revenue for the AY 2009-10 are identical to that of the grounds raised by the Revenue in its appeal for the AY 2011-12 (ITA No.198/Viz/2022) which is adjudicated in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggrieved by the additions made by the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A)-NFAC. 36. On appeal, the Ld. CIT(A)-NFAC considering the submissions made by the assessee s Authorized Representative and following the orders of the ITAT, Visakhapatnam Bench on the issues in the assessee s own case, the Ld.CIT(A)-NFAC partly allowed the appeal of the assessee. However, the Ld. CIT(A)-NFAC denied the TDS credit as it was not reflecting in Form-26AS and also upheld the order of the Ld. AO with regard to interest u/s. 234C of the Act. Aggrieved by the order of the Ld. CIT(A)-NFAC, the assessee is in appeal before the Tribunal by raising the following grounds of appeal: 1. The order of the Ld. CIT(A) is contrary to the facts and also the law applicable to the facts of the case. 2. The Ld. CIT(A) ought to have directed the assessing officer to grant credit for TDS of Rs. 9,08,06,937/- on the basis of tax deduction certificate issued by the diductors. 3. (a) The Ld. CIT(A) is not justified in not directing the Assessing Officer to cancel the interest charged u/s. 234C of the Act. (b) The Ld. CIT(A) ought to have appreciated that the advance tax liability arise on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the due dates for the payment of advance tax liability. The Ld. AR further submitted that since the assessee was not sure about the granting of the restructuring of the package, the assessee could not take into consideration the grant to be received and hence there is a short fall for the payment of advance tax liability which leads to charging of interest u/s. 234C of the Act. The Ld. AR submitted that the details of sanction letter dated 23/3/2011 has been produced before the Ld. Revenue Authorities. However, these were not considered by the Ld. Revenue Authorities. He therefore pleaded that the waiver of interest u/s. 234C may be granted to the assessee. 41. Per contra, the Ld. DR submitted that there is no provision in the Income Tax Act, 1961 to grant exemption from the levy of interest u/s. 234C of the Act. He therefore submitted that the Ld.CIT(A)-NFAC has rightly rejected the plea of the assessee. Further, the Ld. DR also argued that the assessee has not filed any request to the appropriate authority for waiver of interest. He therefore pleaded that in this issue, the order of the Ld. CIT(A)-NFAC be upheld. 42. We have heard both the sides and perused material available ..... X X X X Extracts X X X X X X X X Extracts X X X X
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