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2017 (5) TMI 1592 - HC - Income TaxProvision for diminution in value of stock - Held that:– In any case since stock are valued at cost or market price whichever is lower and these inventory has no value, the same is to be allowed to the assessee in view of the accounting principles and the ratio laid down in CIT Vs. Hotline Teletube and Components Ltd. [2008 (8) TMI 6 - HIGH COURT DELHI] Provision for diminution in value of stock is allowable as business loss. TDS u/s 195 OR 194C - existence of TDS liability - Held that:- This company is incorporated on 29.11.2001 having registered office at Mumbai. Therefore, it is an Indian Co. as defined u/s 2(26) and is a company resident in India u/s 6(3). All payment made to this company towards advertisement charges is in Indian currency. Tax is deducted at source on such payment u/s 194C. Sec. 195 is applicable when payment is made to a non resident. Admittedly, payment to Group M Media India Pvt. Ltd. is a payment to resident and not a non resident. Therefore, section 195 is not attracted. The AO has not disputed the genuineness of the payment and therefore only because there is no agreement for the advertisement work with this company cannot be viewed adversely. Thus disallowance made by the AO is incorrect, against law and the same is deleted. The order has admitted that bills and vouchers of expenses, as desired, were produced for verification which was test checked. The observation of AO that services has been received by the assessee against these payment and therefore he should have deducted tax at source on the value of the gift is ill founded in as much as the payment is not against the services but against the sale of goods to the distributors and therefore TDS provisions are not applicable. - Decided in favour of the assessee and against the department
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