TMI Blog2015 (9) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of DCIT vs. Madison Communication Pvt. Ltd (2015 (9) TMI 945 - ITAT MUMBAI) has also upheld the stand of the assessee that such payments are subject to deduction of tax at source under section 194J of the Act and not under section 192 of the Act. In conclusion, we therefore, uphold the plea of the assessee and set aside the order of CIT(A) and direct the Assessing Officer to treat the payments made to the Creative Consultants as liable for deduction of tax at source under section 194J of the Act and not under section 192 of the Act. As a consequence, the demand raised on account of shortfall of deduction of tax at source under section 201(1) of the Act and interest under section 201(1A) of the Act qua the aforesaid issue is hereby set aside. - Decided in favour of assessee. - ITA NO. 6800/MUM/2012(A.Y 2010-11), ITA NO.6801/MUM/2012(A.Y.2011-12), ITA NO.7380/MUM/2012(A.Y. 2010-11), ITA NO.7381/MUM/2012(A.Y.2011-12), C.O.NO.28/MUM/2014, C.O.NO.29/MUM/2014 - - - Dated:- 28-8-2015 - SHRI G.S.PANNU AND SHRI AMIT SHUKLA, JJ. For The Revenue : Shri Akhilendra Yadav For The Assessee Ms. Arati Vissanji and Ms. Aastha Shah ORDER PER G.S. PANNU,AM: T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consultants are concerned, they do not entail normal benefits and perquisites which are provided to the employees, such as Provident fund, leave encashment, gratuity, etc. A reference has also been made to the sample copies of invoices raised by the consultants, which are placed in the Paper Book, to point out that service tax was charged by the consultants, which clearly established that it is a case where services have been provided to the assesssee and it is not a case of an employer-employee relationship. In the course of hearing, the Ld. Representative for the assessee has also point-wise assailed the analysis of the terms of employment of the consultants discussed by the Assessing Officer in the assessment order to demonstrate that the issue has been improperly appreciated by the lower authorities. It has also been pointed out that in an identical situation involving the case of an advertising/marketing services company, such payments on hiring of consultants have been held to be subjected to tax deduction at source under section 194J of the Act by the Mumbai Tribunal in the case of DCIT vs. Madison Communication Pvt. Ltd. in ITA Nos. 4991 4992/Mum/2013 C.O Nos. 207 208/M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xt of the business realities in which the assessee operates. Such restrictions cannot imbibe an employer-employee relationship to the contract with consultants. It is also quite clear that that the benefits of an employeremployee relationship which are normally available, do not apply to the impugned consultants, for instance, provident fund, leave encashment, gratuity benefits, etc. In a similar situation, our Coordinate Bench in the case of DCIT vs. Madison Communication Pvt. Ltd (supra) has also upheld the stand of the assessee that such payments are subject to deduction of tax at source under section 194J of the Act and not under section 192 of the Act. The following discussion in the order of the Tribunal is relevant 10. We have carefully perused the orders of the authorities below. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the Tribunal came to conclude that such payments were liable for deduction of tax at source in terms of section 194C of the Act and not under section 194-I of the Act as contended by the Revenue. The following discussion in the order of the Tribunal dated 23/5/2005(supra), is worthy of notice:- 9. We have carefully considered the entire material on record and find that the Ld. CIT(A) very carefully considered the relevant case law and the circular of the Board. He has undertaken a proper analysis and examination of the nature of work done by the assessee. The ld. CIT(A) has also taken into account the aspect that the work of advertisement includes various services and thus the payment was made by the assessee for composite services and not for hiring any premises or land or building. In the case of National Panasonic India Pvt. Ltd., Delhi Bench D of ITAT (supra) has observed as under: 6. We have carefully considered the rival contentions and the material on record. Section, 194-I of the Act mandates a person, other than an individual or a Hindu undivided family (HUF), paying rent to a resident to deduct tax at source at the time of credit or payment, whichever is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntract for putting up a hoarding is in the nature of advertising contract and provisions of section 194C would be applicable. It may, however, be clarified that if a person has taken a particular space on rent and thereafter sublets the same fully or in part for putting up a hoarding, he would be liable to TDS under section 194I and not under section 194C of the Act. 9.4 From the above, it is clear that the Assessing Officer was not justified in applying the provisions of section 194I in the case of the assessee. On the other hand, the Ld. CIT(A) has adopted a very correct interpretation of the relevant provisions of section 194I and 194C and has applied such construction after property appreciating the facts and circumstances relating to this matter including the relevant aspects of the work done by the persons to whom the payments were made by the assessee. We, therefore, do not find any scope to interfere in the findings of the Ld. CIT(A), which are upheld by us. Consequently, ground nos. 1 to 5 taken in this appeal are rejected. The appeal is, therefore, dismissed. 7.3 Following the aforesaid precedent, in assessee s own case which has been rendered under identical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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