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2020 (7) TMI 457 - AT - Income TaxTDS u/s 194C - Payment under the head ‘Distributor Hire Charges” - assessee has failed to deduct the tax at source, the AO held that the expenditure is not allowable as provided u/s 40(a)(ia) - HELD THAT:- In the earlier assessments, on identical facts, CIT(A) deleted the addition and it appeared that the department has not filed the appeal. In the subsequent year, though the assessment was made on identical facts, no such addition was made by the AO. AO did not dispute that the payment is the sharing of revenue between the theatre owner and the assessee. AO also has not made out a case, to establish that the payment was either in the nature of contract payment or in the nature of rental payment. In the instant case, the payment was made by the theatre owner who is exhibiting the films, therefore, it cannot be held as rental payment. In the case of rent, the assessee ought to have received the payment, but in the instant case, the assessee is making the payment to film distributor. Assessee is screening the films being the theatre owner, it cannot be held that the same is contract payment. Therefore, we are of the view that the AO has not made out the case of either contractual payment or rental payment for holding that it attracts the TDS. Department also did not make out a case of assessee in default for non deduction of tax at source u/s 201(1). Hence, the order of the Ld.CIT(A) is unsustainable and accordingly, we set aside the order of the Ld.CIT(A) and delete the addition made by the AO. - Decided in favour of assessee.
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