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2022 (7) TMI 1005 - AT - Income TaxTDS u/s 194C - horse transportation charges paid - whether CIT(A) erred in not considering that the charges were in effect reimbursement of expenses paid by the horse owners for the transportation and the subsidy for each horse which is an allowable business expenditure - CIT-A categorizing race horses as livestock and including them within the definition of "Goods" u/s.194C - HELD THAT:- We noted that these payments in the name of horse transportation charges or transport subsidy provided to horse owners by the assessee is nothing but reimbursement on account of fodder charges, food of horse or to meet part of the transportation expenses. Once, this is the fact that these are reimbursement of expenses, the assessee is not liable to TDS u/s.194C of the Act. Further, this issue is covered by the decision of Bangalore Bench of ITAT in the case of Mysore Race Club Limited, [2022 (4) TMI 1426 - ITAT BANGALORE] - Respectfully following the same, we delete the disallowance and allow this ground of assessee’s appeal. Addition of entrance fee paid by non-voting members - Scope of principle of mutuality - HELD THAT:- In view of the recent decision of Hon’ble Supreme Court in the case of Mavilayi Service Co-operative Bank Limited, [2021 (1) TMI 488 - SUPREME COURT] and the decision of Hon’ble Supreme Court in the case of Bankipur Club Ltd. [1997 (5) TMI 392 - SUPREME COURT] we are of the view that the assessee is entitled for claim of principle of mutuality in regard to entrance fee received from non-voting members. Hence, we allow this issue of assessee’s appeal. TDS u/s 194J - telecast expenses as ‘Host Club expenses’- disallowance of reimbursement of expenses for non-deduction of TDS u/s.194J by invoking the provisions of section 40(a)(ia) - HELD THAT:- We noted that the AO as well as the CIT(A) was of the view that the explanation of reimbursement cannot be accepted and according to them, the full facts of the telecast charges incurred by Hyderabad Race Club not being on record and the profit element in the reimbursement made by Hyderabad Race Club cannot be ruled out. According to AO as well as the CIT(A), the assessee has to deduct TDS u/s.194J of the Act and therefore, the disallowance was made u/s.40(a)(ia) of the Act. We noted that in the similar state of facts, the Bangalore Bench of ITAT in the case of M/s. Mysore Race Club Limited in [2022 (4) TMI 1426 - ITAT BANGALORE] has considered this issue of reimbursement of expenses given to Bangalore Turf Club by Mysore Race Club Ltd., and on these reimbursement of expenses, TDS was not deducted and Tribunal i.e., Bangalore Bench of the Tribunal held that the matter was restored back to the file of the AO - Thus we restore this issue back to the file of the AO. The AO will decide in term of directions given by Bangalore Bench, which is reproduced above. This issue of assessee’s appeal is set aside to the file of the AO. Disallowance of police and fire service charges - HELD THAT:- We noted that the AO has disallowed these charges as the assessee has not filed any evidence to prove the payments made. Even the CIT(A) has disallowed stating that the assessee is unable to produce any vouchers or unable to put any defense in support of its ground. Now, before us, the ld.counsel made a simple plea that let the matter go back to the file of AO to provide one more opportunity to the assessee to produce the evidence. Hence, we set aside this issue back to the file of the AO.
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