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2016 (5) TMI 37 - AT - Income TaxTDS u/s 194C - payments to camera attendants engaged on 'ad-hoc' basis for a day or two or as and when required basis - Held that:- The payments to the persons engaged on 'ad-hoc' basis do not fall within the expression 'work' for the purposes of section 194C of the I.T. Act, 1961. The appellant has incurred the impugned expenditure on account of engaging some camera attendants on ad-hoc basis i.e. for a day or two or as and when required basis. Obviously, an activity of engaging some camera attendants for using them in the business of providing of video production services would not amount to contract for carrying out of 'work' as contemplated under section 194C of the I.T. Act, 1961. There is no material on record to demonstrate that the impugned payments constituted payments for carrying out of any work within the meaning of section 194C. of the Act. The Assessing Officer has not asserted that there was any contract between the appellant and the above individuals for providing services as camera attendants. Engaging some persons on 'ad-hoc' basis or 'as and when required' basis, in my view, cannot be equated to a contract contemplated u/s 194C of the I.T. Act, 1961. Therefore, considering the facts and circumstances of the case, hold that the AO was not justified invoking section 40(a)(ia) and making impugned disallowance. - Decided in favour of assessee Payment of interest for delayed payments of certain types of taxes and imposts i.e. cess, purchase tax, sales-tax etc.- whether the impugned sum was compensatory or penal in nature? - Held that:- The expenditure in respect of payments of interest on late deposit of service tax is an allowable business expenditure incurred by the appellant for the purpose of carrying on its business. The interest on delayed payments of service tax is certainly compensatory in nature and hence allowable as deduction as it is not in the nature of penalty. The facts of the cases cited by the Assessing Officer are completely different from the facts of the instant case as they relate to non-compliance of specific provisions of Income-tax Act and payment of penalty for nonpayment/ delayed payment of sales-tax. Penalty and interest are two different things and thus cannot be equated. The penalty is an impost for an infraction/violation of any law whereas interest is an impost of a compensatory nature for holding the statutory dues for a period longer than as stipulated by the relevant law. Therefore, considering the facts and circumstances of the case and respectfully following the various case laws hold that that the interest claimed on delayed payment of service-tax is an allowable expenditure u/s 37(1) of the I.T. Act, 1961 - Decided in favour of assessee
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