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ACIT Central Circle-8, New Delhi Versus Zoom Communication Ltd.

2016 (5) TMI 37 - ITAT DELHI

TDS u/s 194C - payments to camera attendants engaged on 'ad-hoc' basis for a day or two or as and when required basis - Held that:- The payments to the persons engaged on 'ad-hoc' basis do not fall within the expression 'work' for the purposes of section 194C of the I.T. Act, 1961. The appellant has incurred the impugned expenditure on account of engaging some camera attendants on ad-hoc basis i.e. for a day or two or as and when required basis. Obviously, an activity of engaging some camera att .....

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ces as camera attendants. Engaging some persons on 'ad-hoc' basis or 'as and when required' basis, in my view, cannot be equated to a contract contemplated u/s 194C of the I.T. Act, 1961. Therefore, considering the facts and circumstances of the case, hold that the AO was not justified invoking section 40(a)(ia) and making impugned disallowance. - Decided in favour of assessee

Payment of interest for delayed payments of certain types of taxes and imposts i.e. cess, purchase tax, sales .....

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y different from the facts of the instant case as they relate to non-compliance of specific provisions of Income-tax Act and payment of penalty for nonpayment/ delayed payment of sales-tax. Penalty and interest are two different things and thus cannot be equated. The penalty is an impost for an infraction/violation of any law whereas interest is an impost of a compensatory nature for holding the statutory dues for a period longer than as stipulated by the relevant law. Therefore, considering the .....

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nst the order dated 22.10.2013, passed by the ld. CIT(A)-XXXII, New Delhi in appeal no. 135/ 2013-14, relating to A.Y. 2010-11. 2. None put in appearance on behalf of the assessee at the hearing. The notice of hearing sent to assessee at the address furnished in column no. 11 of form no. 36 has been returned unserved with the postal remarks no such firm . Under these circumstances we proceed to dispose of the departmental appeal, ex parte, qua the assessee and in that process we have heard ld. D .....

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company had made certain payments and no TDS had been deducted thereon. He, therefore, made a disallowance u/s 40(a)(ia) of ₹ 4,25,300/-. Further he noted that assessee had debited an amount of ₹ 55,63,143/- under the head Interest on delayed payments . The assessee s explanation was as under: 'Interest on delayed payments includes interest on late deposit of Income Tax, TDS, Service Tax and penalty for late filing of service tax return paid voluntary. Interest on income Tax and .....

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and penalty for belated filing of returns) both of which are automatic and mandatory levies, required to be discharged before filing of the statutory service tax return". 5. The AO, however, did not accept the assessee s contention and made a disallowance of ₹ 46,11,914/-, inter alia, observing that assessee itself had admitted that it had committed fault of late filing the service tax return and late deposits of TDS, Income tax and service tax. 6. Ld. CIT(A) partly allowed the asses .....

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d payment of service tax. 3. (a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/ all of the grounds of appeal before or during the course of the hearing of the appeal. 7. Apropos ground no. 1, ld. CIT(A) after detailed examination of facts and written submissions, reproduced in his order in para 6, has pointed out that the impugned payments were made to Camera attendants who were hired on ad hoc basis and, there .....

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ents to some persons exceeded ₹ 75,0001- in aggregate in a year and therefore, the same were liable for deduction at source, which was not done by the appellant. On perusal of the written submissions made before the Assessing Officer and filed before me, it is seen at the impugned payments were made to camera attendants. The appellant has explained that these payments were made to camera attendants hired on ad-hoc basis and therefore TDS provisions were not applicable as it was a payment t .....

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tivity of engaging some camera attendants for using them in the business of providing of video production services would not amount to contract for carrying out of 'work' as contemplated under section 194C of the I.T. Act, 1961. There is no material on record to demonstrate that the impugned payments constituted payments for carrying out of any work within the meaning of section 194C. of the Act. The Assessing Officer has not asserted that there was any contract between the appellant and .....

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round fails. 9. Apropos ground no. 2, we find that the sole controversy is whether the impugned sum of ₹ 46,11,914/- was compensatory or penal in nature. The payment of interest for delayed payments of certain types of taxes and imposts i.e. cess, purchase tax, sales-tax etc. is definitely compensatory in nature, as it is calculated with reference to the period for which delay in deposit of the same has been committed. We are in agreement with the following observations made by ld. CIT(A) .....

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