Gujarat High Court
Principal Commissioner Of Income Tax 4 vs Jyotindra International on 9 April, 2018
Author: Akil Kureshi
Bench: Akil Kureshi, B.N. Karia
C/SCA/5369/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION No. 5369 of 2018
With
R/SPECIAL CIVIL APPLICATION No. 5370 of 2018
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PRINCIPAL COMMISSIONER OF INCOME TAX 4
Versus
JYOTINDRA INTERNATIONAL
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Appearance :
Mrs MAUNA M BHATT, Advocate for the PETITIONER(s) No. 1
for the RESPONDENT(s) No. 1
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CORAM:Â HONOURABLE Mr. JUSTICE AKIL KURESHI
and
HONOURABLE Mr. JUSTICE B.N. KARIA
9th April 2018
ORAL ORDER (PER : HONOURABLE Mr. JUSTICE AKIL KURESHI)
These writ petitions preferred by the Income-tax Department arise in the common factual background and we have treated Special Civil Application No. 5369 of 2018 as a lead matter, from which facts have been drawn.
Petitioner challenges order of Income Tax Appellate Tribunal dated 21st August 2017 by which the Tribunal partially allowed the respondent-assessee's application for rectification.
The issue pertains to deduction of TDS on Ocean Freight paid by the assessee to one Sohan Logistics Private Limited. Revenue's contention appears to be that such payment require deduction of Page 1 of 4 C/SCA/5369/2018 ORDER tax at source which the assessee failed to do. The assessee contends that such freight was paid to non-resident foreign companies, and therefore, no tax was required to be deducted at source. While disposing of tax appeal, the Tribunal had observed inter alia that the Assessing Officer, while making addition had noted that Soham Logistics Private Limited was assessee's Custom Agent and not an agent of Non Resident Foreign Companies. The Tribunal thereafter further observed that, "before us also, no material has been placed on record by the assessee to demonstrate that the Sohan Logistics Private Limited, to whom the Ocean freight was paid by the assessee were Non-Residents or were agents of Non Residents."
While entertaining the assessee's application for rectification, in the impugned order, the Tribunal has observed as under :-
"The ITAT in its order dated 4.03.2015 held that in the case of the assessee there was no material on record to demonstrate that Sohan Logistic Private Limited was agent of non-resident ship owners, therefore, the disallowance under Section 40 [a](ia) of expenditure on ocean freight was justified. In this connection, we find that contention of the assessee before the learned CIT [A] was that the above sum were only reimbursement of expenses paid by Sohan Logistics Private Limited to foreign non-resident shipping company. We find that the learned CIT [A] has restored this matter to the file of the Assessing Officer to verify whether separate bills were raised Page 2 of 4 C/SCA/5369/2018 ORDER for the above sums according to the decision in the case of M/s. Satya Exim Private Limited. The ITAT vide its order dated 4th March 2015 also stated that the learned CIT [A] has not given any finding with respect to the residential status of the person to whom the Ocean freight has been paid.
We observe that paper book furnished by the assessee at the time of appellate proceedings containing details of person to whom the ocean freight paid on behalf of the assessee by Sohan Logistics Private Limited and freight certified of non- resident shipping companies etc., are required to be verified to find out the residential status of the person to whom the ocean freight has been paid to decide this issue as per law. Therefore, we are of the opinion that the ITAT vide its order dated 4th March 2015 had disallowed the said expenses without referring the documents contained in the paper book which required necessary verification to decide this issue according to law. In view of this, we considered that it will be appropriate to restore this issue also to the file of the Assessing Officer to decide it afresh as per law, after necessary verification of the documents furnished by the assessee. Therefore, we allow Miscellaneous Application of the assessee on the matter to this matter to the extent as elaborated above."
From the above portion of the order of the Tribunal which is reproduced, it can be seen that the Tribunal admitted that in the Page 3 of 4 C/SCA/5369/2018 ORDER earlier order disposing of the Tax Appeal, the Tribunal had not referred to certain documents contained in the paper-book and which require necessary verification to decide the issue, according to the law. Resultantly, the Tribunal restored the issue to the file of the Assessing Officer to decide it afresh, after necessary verification of the documents furnished by the assessee.
We do not find that the Tribunal has committed any error in exercising the power of rectification. When the Tribunal found that in the original order, a certain issue was decided without reference to the relevant documents which already form part of the paper-book, it was open for the Tribunal to correct any such error. The Tribunal has merely placed the issue back before the Assessing Officer for fresh adjudication.
In the result, both these writ petitions fail and the same are accordingly dismissed.
[Akil Kureshi, J.] [B.N Karia, J.] Prakash Page 4 of 4