TMI Blog2011 (10) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Act 1961. 2. Grievances of the assessee, as set out in the memorandum of appeal, are as follows: 1. The learned CIT (A) erred in upholding the order of the learned Assessing Officer disallowing a sum of Rs. 14,74,932 under section 40(a)(ia) on the ground that the appellant failed to deduct tax at source under section 194 C of the Act, on payments made towards printing/ purchase of stationery and advertisement expenses. 2. The learned CIT(A) erred in enhancing the income of the appellant by Rs. 39,26,528 by disallowing Rs. 32,61,994 out of auditorium hire charges and Rs. 6,64,534 out of stage erection charges under section 40(a)(ia) on the ground that the appellant had failed to deduct tax at source under section 194 C of the Act. 3. The short issue that really needs our adjudication is whether or not, on the facts and in the circumstances of this case, provisions of tax withholding requirements under section 194C can be pressed into service at all. It is on this short but contentious issue that the learned representatives have advanced their erudite arguments before us. 4. Briefly stated, the relevant material facts are as follows. The assessee before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clients (i.e. sponsors) have considered the assessee as a contractor, the payments made to him are treated as payments made for executing a work contract, and deducted TDS under section 194C". The Assessing Officer was of the view that "these TDS certificates are conclusive proof that the assessee has been carrying out the work of organizing events under contract with the clients" and "these receipts make him a contractor and place him within the scope of Section 194C(2)". He then referred to the facts regarding assessee's turnover for the preceding year to point out that even though the assessee is an individual, since he is a sub-contractor and since his turnover exceeds specified amount, he is hit by the provisions regarding tax withholding requirements. The Assessing Officer noted that the assessee has made payments aggregating to Rs. 8,43,570, in respect of printing and stationery charges, and aggregating to Rs. 6,31,362, in respect of advertising charges, from which no taxes have been deducted at source. It was also noted that when assessee does not comply with the tax deduction at source requirements, the related expenditure is required to be disallowed, in terms of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent of such sum as income-tax on income comprised therein. Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the sub-contractor, shall be liable to deduct income-tax under this sub-section. Explanation I : For the purposes of sub-section (2), the expression "contractor" shall also include a contractor who is carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the Government of a foreign State or a foreign enterprise or any association or body established outside India. Explanation II : For the purposes of this section, where any sum referred to in sub-section (1) or sub-section (2) is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the backdrop. Branding on the brochures to promote India Retail Summit. Branding on admit cards for both days of the summit. Inserts in Seminar Kit. Strategic rehearsed announcements at regular intervals. Passes for both days of the summit. Invitations to the awards for the retail excellence. The awards for the retail excellence will be followed by cocktails and dinner. Stall space in pre function area. Playing of commercials/ presentations during the breaks. Any other way, as is mutually decided. On successful completion of the summit, you may please send a bill to us, towards co-sponsorship amount of Rs. 1.25 lakhs to enable us to do the further needful. Along with the bill, you may also arrange to have a few photographs of the bank's staff at the seminar session, sent for our records .. 8. The above arrangement does not, by any stretch of logic, amount to the assessee having undertaken to carry out the work of organizing the conference, i.e. India Retail Summit in this case. It is simply a case in which the assessee has received the money, from a commercial organization, in respect of that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of law or by way of abundant caution, the assessee has to, in accordance with the law, claim tax credit in respect of the same. This claim for tax credit cannot prejudice the stand of the assessee in determination of merits of the applicability of Section 194C(2); that has to be adjudicate on its merits and in accordance with the law. We may also mention that during the course of the hearing a reference was made to decision of a coordinate bench in the case of EMC v. ITO [2010] 37 SOT 31 (Mum.), but, having perused the same and having noticed that in the said case the events were organized by EMC on a job work basis - as assigned by the clients as against the facts of the present case wherein events are conceptualized and executed by the assessee and the client pays sponsorship monies only for collateral benefits from the same, we find that it does not have much bearing on the issues arising our adjudication in this case. We, therefore, see no need to deal with the same in detail. 10. For the reasons set out above, as also bearing in mind entirety of the case, we are of the considered view that Section 194 C(2) has no applications on the facts of this case. The assessee did n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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