INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - PCIT failed to consider the documents furnished by assessee -

PCIT invoked power of revision under section 263 on the ground that without deducting TDS on the export freight, assessee company had paid export freight. According to PCIT, as no TDS return showing the details of deduction of any tax in respect of the aforesaid export freight had been filed and as AO had not verified the same, the scope of provisions of TDS on export freight at the rates specified, the entire amount was required to be disallowed under section 40(a)(ia). PCIT held that assessment order was erroneous and prejudicial to interest of Revenue. Held: Tribunal held that where payment was made to shipping agents of the nonresident, ship owner or charter, the agent steps into shoe of the Principal i.e. shipping company and according to the provisions under section 172 which provides for shipping business in respect of the non-residents would be applicable and provisions of section 194C or 195 which provides for deduction of tax at source shall not be applicable. PCIT failed to consider during the course of assessment proceedings that the assessee had furnished the relevant materials in respect of export freight payment and it was also not controverted by PCIT, therefore, it could not be said that assessment order was erroneous or prejudicial to the interest of the revenue in any manner.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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