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2016 (3) TMI 1011 - ITAT KOLKATA

2016 (3) TMI 1011 - ITAT KOLKATA - TMI - TDS u/s 194C - non tds on advertisement expenses - disallowance u/s 40(a)(ia) - revision u/s 263 - Held that:- find from the amended provision of Finance Act, 2012 that in case, assessee fails to deduct TDS from the payment of expense to the party concerned and receiver of the payment has paid tax on the amount received then assessee should not be held as guilty for default of TDS u/s 40(a)(ia) of the Act. Ld. AR submitted that a certificate from Chartere .....

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so to the interest of revenue. So in this view of the matter the order passed by Assessing Officer is not prejudicial to the interest of revenue. Regarding the claim of assessee that the printing material expense is out of the purview of TDS provision, we find that this is a transaction of purchase of printing material as evident from the bill of the party concern M/s Jyoti Enterprise which are placed at page No. 6 to 8 of the paper book. We also find that there was no contract between the asses .....

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ement for the interest income and the explained that part of the interest income was pertaining to the earlier year. Therefore we reverse the order of the ld. CIT passed under section 263 of the Act.- Decided in favour of assessee - ITA No.769/Kol /2014 - Dated:- 11-2-2016 - Shri Waseem Ahmed, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member For The Appellant Shri G. Banerjee, FCA For The Respondent : Shri S. Srivastava, CIT-DR ORDER PER Waseem Ahmed, Accountant Member:- This a .....

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f ₹ 266,459 representing purchase of material/goods being excluded from TDs u/s. 194C(3) read with sub clause (e) of explanation is wrong, erroneous, excessive, arbitrary and deserves to be deleted/reduced. 2. For that in the facts and circumstances of the case, the direction of addition u/s. 40(a)(ia) of ₹ 56,04,100 representing expenditure/payments not exigible to tax deduction at source or otherwise not disallowable is wrong, erroneous, excessive, arbitrary and deserves to be dele .....

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and medicines. Assessment of assessee was completed u/s 143(3) of the Act by Assessing Officer on 15.12.2011. While passing the order of AO Ld. CIT found from the records that assessment order passed by AO is erroneous in so far as prejudicial to the interest of revenue on account of following reasons:- (1) assessee claimed advertisement expenses of ₹64,10,506/- in its profit and loss account without deducting the TDS under the Act (2) assessee has under stated the interest income for S .....

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assessee during the year under consideration; (ii) Even if it is presumed that assessee has defaulted the provision of TDS u/s. 40(a)(ia) of the Act then also the order of AO is not erroneous and prejudicial to the interest of revenue, for the reasons as under:- 1) As per the decision of Merilyn Shipping & Transort vs. Addl. CIT in ITA No. 477/Viz/2008 held that the amount remaining outstanding at the end of year attract the Sec. 40(a)(ia) of the Act with respect to Sec. 194C of the Act. The .....

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M/s Jyoti Enterprise 4) As per Board s Circular N. 1 of 2014, the service tax component embodied in advertisement expense is to be excluded from the provision of TDS; The ld. CIT has disregarded the claim of the assessee by observing that the decision of Merilyn Sipping & Transport (supra) has been reversed by this jurisdictional High Court in the case of CIT v. Crescent Export Syndicate in 216 taxmann 258 (Cal). Therefore the provisions of TDS shall be applied on both the paid as well as pa .....

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rected the AO to include the expenses incurred in relation to printing materials for an amount of ₹2,66,459/-. 4. Aggrieved, assessee preferred an appeal before Ld. CIT(A) Shri G. Banerjee, Ld. Authorized Representative appearing on behalf of assessee and Shri S. Srivastave Ld. Departmental Representative appearing on behalf of Revenue. 5. We have heard both the parties and perused the materials available on record. Ld. AR submitted paper book containing pages 1 to 40 and stated that asses .....

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er will be exempted from the provision of Sec. 40(a)(ia) of the Act. 6. On the other hand, Ld. DR cited a decision of the Hon'ble jurisdictional High Court in the case of Commissioner of Income-tax, Centeral-I, Kolkata v. Maithan International (2015) 56 taxmann.com 283 (Cal) and vehemently relied on the order of Ld. CIT. 7. From the aforesaid discussion, we find that assessee claimed the expense incurred of ₹ 64,10,506/- by debiting from profit and loss account towards advertisement ex .....

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ce Act, 2012 that in case, assessee fails to deduct TDS from the payment of expense to the party concerned and receiver of the payment has paid tax on the amount received then assessee should not be held as guilty for default of TDS u/s 40(a)(ia) of the Act. Ld. AR submitted that a certificate from Chartered Accountant certifying that the party i.e. M/s I.S. Trading to whom the advertisement expenses were paid by assessee that the income tax on the amount received from assessee has been duly pai .....

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ing material expense is out of the purview of TDS provision, we find that this is a transaction of purchase of printing material as evident from the bill of the party concern M/s Jyoti Enterprise which are placed at page No. 6 to 8 of the paper book. We also find that there was no contract between the assessee and the party M/s Jyoti Enterprise for attracting the provision of Sec. 194C of the Act. In our considered view, we reverse the order of Ld. CIT and accordingly this ground of assessee s a .....

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