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TMI Blog2013 (5) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of production of advertising commercial. The Assessing Officer made the disallowance of Rs. 16,17,766/- u/s.40(a)(ia) of the I.T.Act for non deduction of tax by the assessee on various expenses and added the same to the total income of the assessee. In view of aforesaid disallowance u/s.40(a)(ia) of the Act, AO initiated penalty proceedings u/s.271(1)(c) of the Act by rejecting the contention of the assessee that she was under bonafide belief that the impugned expenses were not subject of TDS. AO stated that it is unbelievable that assessee who is into entertainment industry for quite sometime is totally unaware both about the industry norms as well as the provisions of income tax. AO stated that it is absolutely false that she was und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s deducted due to bonafide belief that same was not liable to TDS provision. It was submitted that the genuineness of the payments made by the assessee is not disputed by the authorities below. Ld A.R. placed reliance on the decision of ITAT Ahmedabad Bench in the case of ACIT vs. Mazda Ltd (2012) 33 CCH 047 (Ahd Trib) and submitted that the Tribunal cancelled the penalty which was levied on account of disallowance of royalty payment and technical know how expenses after invoking section 40(a)(ia) of the Act. He submitted that case of the assessee is similar to the facts of the case of Mazda Ltd (supra). Ld A.R. furnished a copy of the order of the Tribunal to substantiate his submission. Ld A.R. placed reliance the decision of Hon'ble Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not genuine or was fabricated but in view of provisions of law that assessee did not deduct TDS thereon. We are of the considered that view that the ratio of judgment of Hon'ble Apex Court in the case of Reliance Petroproducts Ltd (supra) squarely applies to the facts of the case before us and, therefore, levy of penalty is not justified. We also observe that similar issue has also been considered by ITAT Ahmedabad in the case of Mazda Ltd (supra), wherein, levy of penalty u/s.271(1)(c) of the Act was cancelled which was levied on account of disallowance of claim for deduction of royalty and technical know how as per section 40(a)(ia) of the Act., as the assessee failed to deduct TDS on above payments. The ratio of the said case also appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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