PER BENCH: These three appeals, (two at the instance of the revenue and one at the instance of the assessee) and two Cross Objections (both at the instance of the assessee), are directed against the consolidated order of the CIT(A) dated ITA Nos 302,400 & 40/C/20141 & CO 45 & 46/C/2014 2

24.3.2014. The order of the CIT(A) arises out of the order passed u/s 201(1) and 201(1A) of the Act. The relevant assessment years are 2007-08 and 2008-09. 2 Both the ld counsel for the assessee and the ld DR submitted that if the departments appeals are disposed off (namely ITA No. 400 and 401/Coch/2014), the same would take care of the disposal off the appeal in ITA No. 302/Coch/2014 and the Cross Objections filed by the assessee. Therefore, we shall take up for adjudication the revenues appeal in ITA nos 400 & 401/Coch/2014. In both the appeals for AY 2007-08 and 2008-09, identical grounds are raised. Though four grounds are raised in each of the appeal, all the four grounds relate to a solitary issue; namely whether charter hire charge paid by the assessee attract, the provisions of sec. 194-I of the Act, instead of section 194-C of the Act. 3 Briefly stated the facts of the case are as follows: The assessee is a private limited company. It is engaged in the business of shipping agency, clearing and forwarding, stevedoring and other allied services. The assessee, in the course of its business, had taken certain ships on hire and had paid charter hire charges. For the AY 2007-08 the assessee had made total payment of Rs. 12,61,18,420/- as charter hire charges. Similarly for the AY 2008- 09, the total payment was to the tune of Rs 2,30,34,169/- as charter hire charges. The Assistant Commissioner of Income Tax (TDS) was of the view that when ITA Nos 302,400 & 40/C/20141 & CO 45 & 46/C/2014 3 charter hire charges are paid, the payments attracted the provisions of sec. 194-I of the act and assessee having failed to deduct tax at source was liable u/s 201(1) and 201(1A) of the Act. The ACIT(TDS) was of the view that it is not a case of simple contract for transport of goods but contract for hire of shipping vessel. The ACIT(TDS) rejected the assessees argument that ships do not form part of plant and machinery so as to attract section 194-I. Accordingly, the ACIT(TDS) passed order for the AY 2007-08 and 2008-09 by holding that charter hire charges paid by the assessee attracted TDS provisions u/s 194-I of the Act. 4 Aggrieved, the assessee filed appeal before the CIT(A). The CIT(A) followed the earlier appellate order dated 9.4.2012 in ITA No. 72/R-1/E/CIT(A)- II/10-11 (appeal as against the assessment completed u/s 143(3) of the Act). The CIT(A) held that even though the provisions of section 194-I would not be attracted, the provisions of section 194C are to be attracted and accordingly partly allowed the appeal of the assessee. 5 The revenue, being aggrieved by the decision of the CIT(A) in holding that provisions of sec. 194-I would not be attracted, is in appeal before us; whereas the assessee is aggrieved by the order of the CIT(A) in holding the provisions of sec. 194C is attracted, is in appeal as well as Cross Objections. ITA Nos 302,400 & 40/C/20141 & CO 45 & 46/C/2014 4 6 We have heard the rival submissions and perused the material on record. The issue for our consideration is whether it is a case of contract for carrier coming within the provisions of sec 194C of the Act or hire simplicteor coming within the provisions of sec. 194-I of the Act. Further, the question is whether payment for hire of ship simplicitor could come within the ambit of extended definition of rent u/s 194-I of the Act. In order to examine whether it is a case of contract of carrier coming within the provisions of sec. 194C or hire simplictor of ships coming within the provisions of sec. 194-I, reading of contract/agreement entered between the assessee and the owner of the ships is must. The contract entered between the assessee and the ship owners are not placed on record though there is a reference to some of the clauses of contract in the order passed u/s 201 (1) and 201(1A) of the Act. We find the issue has not properly deliberated by both the AO and the CIT(A) with regard to the contract entered between the assessee and the ship owners. Therefore, for a proper appraisal of the issue and in the interest of justice and equity, we are of the view that the matter needs to be examined by the ACIT(TDS) afresh. The ACIT(TDS) shall examine the contract entered between the assessee and the ship owners, which is the basis for making payment of charter hire charges. The ACIT(TDS) on examination of the agreement/contract shall determine whether it is a case of contract of carrier coming within the ambit of sec. 194C or hire simplictor and whether such hiring of ships come under the provisions of section 194-I of the Act. The ACIT(TDS) shall expeditiously dispose of the matter in ITA Nos 302,400 & 40/C/20141 & CO 45 & 46/C/2014 5 accordance with law as indicated above after affording reasonable opportunity of being heard to the assessee. It is ordered accordingly. 7 In the result, the appeals filed both the revenue and the assessee and also the cross objections filed by the assessee are allowed for statistical purpose. Order pronounced in the open Court on this 20th day of Nov 2015. Sd/- Sd/- ( B P JAIN) (GEORGE GEORGE K) Accountant Member Judicial Member Cochin: Dated 20 th Nov 2015 Devdasj* Copy to:

1. Appellant

2. Respondent

3. CIT(A)

4. CIT,

5. DR

6. Guard File By order Assistant Registrar ITAT, COCHIN