ITA No.192 & CO 137/Mum/2010 ACIT Versus M/s.Merchant Shipping Services Pvt. Ltd., dated 24.11.2010 

Facts of the case 

Briefly stated the facts of the case are that the assessee-company is a shipping agent handling vessels at various Indian ports. A survey was conducted u/s.133A on 09.03.2005 for verification of compliance of deduction of tax at source provisions. During the course of survey it was discovered that in the financial year 2003-2004 the assessee made payment of Rs.12,23,29,581 to M/s.Nava Sheva International Container Terminal Limited (hereinafter referred to as “NSICT”) and deducted tax at source at the rate of 2.05% as provided u/s.194C for which payment was made. The Assessing Officer, however held that container handling was a technical and specialized service.  

CIT(A)

granted relief to the assessee by holding that the assessee has rightly deducted TDS u/s 194C in respect of cargo handling  charges paid by it.  

ITAT

On departmental appeal to the ITAT, as to whether TDS in respect to cargo handling charges paid is to be deducted u/s 194J as per CIT(A) or as per AO u/s 194J. 

Held That

23. At this juncture we are reminded of the well settled rule of generalia specialibus non derogant, which provides that the special provisions override general provisions. In other words, if a special provision has been enacted dealing with a particular thing or situation, then that particular thing or situation is governed by such special provision alone. Application of general provisions stands excluded on that. This rule has got the sanction from several courts in the country including the Hon’ble Apex court in Britannia Industries Ltd. VS. CIT (2005) 278 ITR 546 (SC) and that of the Hon’ble jurisdictional High Court in Forbes Forbes Campbell & Co. Ltd. VS. CIT (1994) 206 ITR 495 (Bom). Coming back to the facts of the present case we find that the payments made to NSICT (Nava Sheva International Container Terminal Limited)  are straightway covered under Explanation III (c) below section 194C(2). This being a specific provision encompassing the payment of carriage, the provisions of section 194J, which are general in the context of not specifically defining the meaning of `technical services’, cannot be applied.

 

What's New 

a.   Income tax Notification No. 85/2010 - Tax Free Transport Allowance hiked to Rs 10000/- (Eighth Amendment) Rules, 2010  (Click for detail)

b.   Income tax Notification No. 84/2010 - Tax Return Preparer (First Amendment) Scheme, 2010  (Click for detail)

c.   Income Tax Notification No. 82/2010 - rules 5C and 5E of the Income-tax Rules, in the category of ‘other Institution’  (Click for detail)

d.   Income Tax Notification No. 83/2010 - for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, in the category of ‘other Institution’  (Click for detail)

e.    Govt to Limit Directorship to 5 Firms  (Click for detail)  

           

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