Case Law Details
DCIT Vs Keshodwala Foods (ITAT Rajkot)
The issue under consideration is whether TDS will be applicable on terminal handling charges u/s 194C?
The assessee in the present case is a partnership firm and engaged in the business of processing/export of marine food. The assessee during the year has incurred processing charges amounting to Rs. 1,98,07,861/-without deducting the TDS under section 194C of the Act. The Assessing Officer observed that such payment was made to the resident transport operator/ labour contractors to load the goods on the ships. Accordingly, the Assessee was required to deduct the tax at source under section 194C of the Act. Thus, the Assessing Officer disallowed the said claim on account of non-deduction of tax at source.
As per the circular no. 723 dated 19.09.1995 states that where the provisions of Section 172 are to apply, the provisions of Section 194C and 195 relating to tax deduction at source are not applicable. The Tribunal considered the said Circular and placed reliance on the decision laid down in the case of Deputy Commissioner of Income Tax v. Hasmukh J. Patel wherein it was concluded that where the provisions of Section 172 would apply, no deduction of tax was required under Section 194C. Therefore, the terminal handling charges paid to the non-shipping companies were covered under the provisions of section 172 of the Act. Hence, the Assessee was not liable to deduct the tax at source under the provisions of section 194C/195 of the Act.
FULL TEXT OF THE ITAT JUDGEMENT
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