TDS on the application of section 40(a)(ia) of the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL , ‘A’ BENCH, CHENNAI

BEFORE SHRI V.DURGA RAO, JUDICIAL MEMBER
AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER

I.T.A.No.2356 & 2357/Chny/2017
Assessment Year: 2013-14 & 2014-15)

M/s. Yem Q Cargo
10/17D, Anaikar Complex,
M.V.Badran Street, Periamet,
Chennai-600 003.
PAN: AAAFY 3261F
Appellant)

Vs 

The Deputy Commissioner of
Income Tax,
Non-Corporate Circle-6
Chennai.
Respondent)

Appellant by : Mr. S.Sridhar, Advocate
Respondent by : Mr. G.Johnson, Addl.CIT

Date of hearing : 15.06.2021
Date of Pronouncement : 21.06.2021

 O R D E R

PER G.MANJUNATHA, AM:

 These two appeals filed by the assessee are directed against separate, but identical orders of the learned CIT(A)-5, Chennai dated 03.07.2017 and pertain to assessment years 2013-14 & 2014-15. Since, facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are being disposed off by this consolidated order.

2. The assessee has more or less raised common grounds of appeal for both assessment years, therefore, for the sake of  brevity, grounds of appeal filed for the assessment year 2013-14 in ITA No.2356/Chny/2017 are reproduced as under:-

“1. The order of the Commissioner of Income Tax (Appeals) 5, Chennai dated 03.07.2017 in I.T.A.No.67/CIT(A)-5/2016-17 for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case.

2. The CIT (Appeals) erred in confirming the action of the Assessing Officer in disallowing the claim of direct expenses/clearing and forwarding charges to the extent of Rs.3,58,19,809/- for want of TDS on the application of section 40(a)(ia) of the Act and consequently erred in adding back such sum in the computation of taxable total income without assigning proper reasons and justification.

3. The CIT (Appeals) failed to appreciate that the provisions prescribing deduction of tax at source had no application for the said payments and ought to have appreciated that consequently applying the provisions of section 40(a)(ia) of the Act for adding back the said sum in the computation of taxable total income was wholly unjustified and erroneous.

4. The CIT (Appeals) failed to appreciate that the collection offreight charges from the customers/exporters and the consequential payment of such sum to the respective airlines having been not disputed, the presumption of the applicability of the TDS provisions was wholly unjustified on the factual matrix of the case.

5. The CIT (Appeals) failed to appreciate the second proviso to section 40(a)(ia) of the Act in proper perspective and further ought to have appreciated the binding judgments cited in that regard thus vitiating his action in confirming the disallowance.

6. The CIT (Appeals) went wrong in recording the findings in this regard in para 7 of the impugned order without assigning proper reasons and justification. 

To know more in details find the attachment file