TMI Blog2015 (6) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... o ₹ 1,27,66,093. Further the assessee has paid the entire amount of ₹ 38,66,773 before the closure of the year and no part of the same is outstanding as on 31.3.2011. The said amount has been accounted by the payee in its regular books of accounts and considered for computing income for the impugned A.Y. Hence applying the decision of the Special Bench in the case of Merilyn Shipping & Transports vs. Additional CIT (A) (2012 (4) TMI 290 - ITAT VISAKHAPATNAM ), we hold that the disallowance u/s 40(a)(ia) cannot be made in respect of the amount which has also been paid during the year. In view of the above discussion, we delete the disallowance of ₹ 38,66,773 u/s 40(a)(ia) for non deduction of TDS and allow the appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J.M These are the cross appeals preferred by the assessee and the Revenue against the order of the CIT (A)-V, Hyderabad, dated 11.08.2014. 2. Brief facts are that the assessee company is engaged in the business of running chit fund business, entertainment, food processing and farm maintenance. For A.Y 2011-12, assessee company filed its return of income on 29.09.2011 admitting total income of ₹ 88,24,87,208 and later filed a revised return of income on 15.3.2013 admitting gross total income of ₹ 88,10,55,036. The AO completed the assessment u/s 143(3) of the Act determining the total income of the assessee company at ₹ 540,53,59,193 by making disallowance u/s 40(1)(ia) for non deduction of taxes on payments made to M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zing infrastructural facilities. This clearly shows that all the payments made by M/s Margadarsi Chit Fund Pvt Ltd to M/s Usha Kiron Movies Ltd is as per this MOU. Out of these payments, some are subjected to TDS, whereas some are not subjected to TDS in the pretext of purchases. This is not acceptable. Because all the payments are made in connection with a composite contract with M/s Usha Kiron Movies Ltd in connection marketing of various facilities created in film city. Hence irrespective of nature of each payment, all the payments should have subjected to TDS. In this connection it is relied on Hon'ble Supreme Court decision in case of Chatturbhuj Vithaldas Jasar v. Moreshwar Parashram (1954) AIR 1954 SC 236. In this case, Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised the following effective grounds: 2(a) The CIT (A) grossly erred in sustaining the disallowance of ₹ 38,66,773 u/s 40(a)(ia) for nondeduction of TDS on payments made to Usha Kiron Movies stating that all payments made to Usha Kiron Movies are by virtue of a contract and therefore, such payments are liable for TDS irrespective of the fact that whether such payments are liable for TDS or not under Chapter XVII-B of the Income Tax Act 1961. The CIT (A) failed to note that most of the items for which payments were made were for supply of goods which do not attract the provisions of tax deduction under chapter XCIIB of the I.T. Act. 1961. (b) Without prejudice to the above, the appellant submits that since tax was deducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the DR and stated that the issues raised in the additional grounds were already there before the AO and the CIT (A) and no fresh facts or additional facts have been brought out by these additional grounds. 11. We heard both the parties. We find that the said issues raised in the additional grounds of appeal are legal issues and go to the root of the matter. Relying upon the decision of the Apex Court in the case of National Thermal Power Corporation (229 ITR 383 (S.C) and the decision of the Hon'ble Bombay High Court in the case of Ahmedabad Electric Company Ltd vs. CIT (199 ITR 351), we admit the additional grounds of appeal. 12. We are of the opinion that the contention of the assessee is to be accepted. If any payment is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sits and accordingly TDS was to be deducted on these payments. Addition of ₹ 451,72,94,766 u/s 40(a)(ia) of the Act made. The CIT (A) deleted the addition. Revenue is in appeal before us. 15. We find that this issue has been decided in favour of the assessee by the jurisdictional High Court for the A.Y 2008-09 in assessee s own case, wherein the appeal filed by the Department was dismissed by the Hon'ble High Court and the Hon'ble Supreme Court upheld the judgment of the Hon'ble High Court of Andhra Pradesh dismissing the SLP filed by the Revenue in SLP No.9454/2014. In this view of the matter, respectfully following the decision of the jurisdictional High Court, whose decision was upheld by the Hon'ble Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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