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2015 (9) TMI 945 - ITAT MUMBAITDS liability - payments made by the assessee for the purpose of display of advertisement of the assessee’s clients - whether the ld. CIT(A) was correct in holding that the provisions of section 194C would apply and not the provisions of section 194J? - CIT(A) deleted the interest levied u/s.201(1A) - Held that:- Considering all the facts in totality, we find that the assessee has entered into a contract with other parties for display of advertisement of its client and the transaction is purely in the nature of contract for the work of advertising as defined in clause VA of Explanation to section 194C of the Act. We decline to interfere with the findings of the ld. CIT(A) and the appeals filed by the Revenue are accordingly dismissed. Whether the consultancy charges paid by the assessee are in the nature of salaries u/s.192 of the Act or in the nature of fees or professional service attracting the provisions of section 194J ? - Held that:- The appointment letter clearly shows that the persons have been appointed as a consultant. Though there is a restrictive clause that during the pendency of agreement with the assessee, the consultants will not take up any other assignment of temporary or permanent nature with any other person. However in our considered opinion, such restrictive covenants are provided in contract to safeguard the interest of the company and to make it sure that the consultants do not give services to the rivals in the same line of business. Merely because of this restrictive covenant, no employer-employee relationship could be established. Further, it is an undisputed fact that the consultants have charged service tax to the assessee and the service tax so collected have been paid to the government. By any stretch of imagination no employee would charge service tax to its employer. Therefore, we do not find any merit in the views taken by the Revenue authorities. The assessee has correctly deducted the tax. We accordingly set aside the findings of the ld. CIT(A) and direct the A.O. to accept the assessee’s contention. - Decided in favour of assessee.
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