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2014 (1) TMI 250 - AT - Income TaxDisallowance made u/s 40a(ia) of the Act – Non-deduction of TDS on cost of television programmes – Applicability of section 194C of the Act – Held that:- Following ASSTT COMMISSIONER OF INCOME TAX Versus M/s USHODAYA ENTERPRISES PVT LTD [2012 (7) TMI 120 - ITAT HYDERABAD] - Expenses towards revenue shares are towards the agreed cost for production of TV serials/programmes - the assessee is associating itself with the producers for getting the programmes telecasted and thereby the assessee gets as source for generating advertisement revenue – thus, the assessee is making payments to various agencies on revenue sharing basis from the income generated through advertisements by way of telecasting the serials or programmes produced by the agencies - The mode of payment is nothing but a payment for contract of work and is squarely covered by explanation III to section 194C which says ‘work’ shall include programmes for such broadcasting or telecasting – Thus, the nature of payments fall within the purview of section 194C – the claim of the assessee is accepted and the order of the CIT(A) set aside – the matter s remitted back to the AO for fresh adjudication – Decided in favour of Assessee. Disallowance of prior period expenses – Held that:- Inasmuch as if an amount of Rs.2,11,34,759 out of total amount of Rs.2,38,85,000 was already offered to tax in the earlier years, the prior period adjustment made in that behalf by the assessee, on account of the concerned parties declining to make the payments due to discrepancies in the billing, the same should be allowed as deduction as bad debts – the order of the CIT(A) set aside and the Assessing Officer is directed to restrict the disallowance made – Decided partly in favour of Assessee. Applicability of Rate of depreciation to accessories of computer – Assessee claimed it to be 60% but revenue restricted at 15% - Held that:- Following Asstt. Commissioner of Income-tax, Circle 16(2), Hyderabad Versus Ushodaya Enterprises Ltd. [2012 (10) TMI 472 - ITAT HYDERABAD] – the order of the CIT(A) upheld in accepting the claim of the assessee for depreciation on computer accessories and peripherals at 60% - Decided against Revenue.
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