J.M. Baxi & Co. v. Dy. CIT - Taxpublishers.in

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The Tax Publishers2015 TaxPub(DT) 5063 (Mum-Trib) : (2016) 068 (II) ITCL 0124 J.M. Baxi & Co. v. Dy. CIT INCOME TAX ACT, 1961 --Tax deduction at source --Under section 194C or 194-IPayment of birth hire charges --Assessee was a partnership firm engaged in the business of shipping agency and it inter alia provided Stevedoring and bulk cargo operations, clearing and forwarding, shipping logistics support services and project logistics amongst other services. It made payments on Mumbai Port Trust towards various charges including “birth hire charges” to which tax was deducted at source in terms of section 194C as contractual charges. As per AO, such payments were in the nature of 'rent' and thus, covered under section 194-I. Therefore, he passed orders under section 201(1) for short deduction of tax at source and also charged interest under section 201(1A). *Held:* In view of Japan Airlines Co. Ltd. v. CIT (2015) 279 CTR (SC) 1, it would be inappropriate to consider the payment of berth charges as rent simplicitor and rather the same was being paid for a host of other services when the vessels were anchored at the port area. Therefore, assessee had rightly deducted the tax at source on berth hire charges paid to Mumbai Port Trust in terms of section 194C as contractual charges. Income Tax Act, 1961 Sections 194C & 194-I *Followed:*Japan Airlines Co. Ltd. v. CIT (2015) 279 CTR (SC) 1 *REFERRED :* United Airlines (2006) 152 Taxman 516 (Del), Dy. CIT v. Japan Airlines (2005) 93 ITD 163 (Del), Singapore Airlines Ltd. v. ITO (2006) 7 SOT 84 (Chennai), CIT v. Singapore Airlines Ltd. (2012) 209 Taxman 581 (Mad) FAVOUR : In assessee's favour A.Y. : 2008-09, 2009-10 and 2010-11 SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2015 TaxPub(DT) 5063 (Mum-Trib) : (2016) 068 (II) ITCL 0124

J.M. Baxi & Co. v. Dy. CIT

INCOME TAX ACT, 1961

--Tax deduction at source --Under section 194C or 194-IPayment of birth hire charges --Assessee was a partnership firm engaged in the business of shipping agency and it inter alia provided Stevedoring and bulk cargo operations, clearing and forwarding, shipping logistics support services and project logistics amongst other services. It made payments on Mumbai Port Trust towards various charges including “birth hire charges” to which tax was deducted at source in terms of section 194C as contractual charges. As per AO, such payments were in the nature of 'rent' and thus, covered under section 194-I. Therefore, he passed orders under section 201(1) for short deduction of tax at source and also charged interest under section 201(1A). Held: In view of Japan Airlines Co. Ltd. v. CIT (2015) 279 CTR (SC) 1, it would be inappropriate to consider the payment of berth charges as rent simplicitor and rather the same was being paid for a host of other services when the vessels were anchored at the port area. Therefore, assessee had rightly deducted the tax at source on berth hire charges paid to Mumbai Port Trust in terms of section 194C as contractual charges.

Income Tax Act, 1961 Sections 194C & 194-I

Followed:Japan Airlines Co. Ltd. v. CIT (2015) 279 CTR (SC) 1

REFERRED : United Airlines (2006) 152 Taxman 516 (Del), Dy. CIT v. Japan Airlines (2005) 93 ITD 163 (Del), Singapore Airlines Ltd. v. ITO (2006) 7 SOT 84 (Chennai), CIT v. Singapore Airlines Ltd. (2012) 209 Taxman 581 (Mad)

FAVOUR : In assessee's favour

A.Y. : 2008-09, 2009-10 and 2010-11