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2016 (9) TMI 589 - ITAT INDORE

2016 (9) TMI 589 - ITAT INDORE - TMI - TDS u/s 194C - default in deducting and paying proper TDS as per law - Disallowance under section 40(a)(ia) - retrospectivity - Held that:- Hon'ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township Private Limited (2015 (9) TMI 79 - DELHI HIGH COURT ) has categorically held that “Second proviso to section 40a(ia) is declaratory and curative in nature and has retrospective effect from Ist April, 2005”. We, therefore, in the interest of justice .....

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6 - Shri D.T. Garasia, JM & Shri O.P. Meena, AM For The Appellant : Shri Mohd. Javed For The Respondent : Shri C.P. Rawka ORDER PER SHRI D.T. GARASIA, AM This is an appeal preferred by the revenue against the order of the learned CIT(A)-I, Indore, dated 10.7.2013. 2. The sum and substance of the grounds of appeal of the revenue is that the learned CIT(A) was not justified in deleting the disallowance under section 40(a)(ia) of the Act as made by the Assessing Officer. 3. The short facts of t .....

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The Assessing Officer observed that the entire expenses claimed on account of advertisement are not allowable this year as assessee company accounted for sales at ₹ 15.28 crores only. The Assessing Officer was thus of the view that the assessee has defaulted in deducting and paying proper TDS as per law. The Assessing Officer, therefore, disallowed the assessee s claim for revenue expenditure amounting to ₹ 154.80 lacs on account of default in deducting TDS. On appeal, the learned C .....

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llowance without discussing the issue at length and without showing any reason therefor. 5. On the other hand, the learned counsel for the assessee submitted that the learned CIT(A) has deleted the addition made by the Assessing Officer on the basis of decision of the Hon'ble Calcutta High Court in the case of M/s. S.K. Tekriwal (supra) as also the decisions of ITAT and as such there is no infirmity in the order of the learned CIT(A). The learned counsel for the assessee categorically submit .....

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ground that TDS was deducted on payment to Dainik Bhaskar @1% applicable for advertisement expenses whereas it was required to be deducted at higher rate, being professional fees. Second ground for disallowance was that the advertisement expenses where more than the income recognised during the year. In the first appeal the ld CIT appeals deleted the addition rightly holding that the expenses where advertisement in nature. However, the ld CIT (appeals) did not decide the alternate ground raised .....

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epartment has filed appeal no 609 on the following grounds:- 1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in holding the nature of expense as advertisement where it was a payment of professional fees as per agreement on record. 2. On facts and circumstances of the case, the CIT(A) has erred in deleting the disallowance under section 40(a)(ia) made by the AO. 3. On the facts and circumstances of the case, the CIT(A) has erred in not adjusting the alternative disallow .....

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ed advertisement in the newspapers on different rates which resulted into substantial response in the shape of booking in the asssesss s project. Therefore, it was clearly a case of advertisement wherein there was no aota of professional services. As regards second issue that the advertisement expenses are more than the receipt shown in the P& l: it is to submit that income has been recognised in accordance with AS9 of Institute of Chartered Accountant. However the business gained is sofaras .....

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tead of section 194J ADIT, International taxation vs. Drilling systems LLC (ITAT Delhi), ITA no.751/Del/2013, date- 09th January,2015- Disallowance u/s 40(a)(ia) shall not be made merely because TDS has been deducted u/s 194C instead of section 194J ADIT, International taxation vs. Express drilling systems LLC (ITAT Delhi), ITA no.751/DEL/2013, Date-09th January, 2015. The provisions of section 40(a)(ia) of the act has two limbs one is where, inter alia, assessee has to deduct tax and the second .....

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due date specified in sub section (1) of section 139. This section 40(a)(ia) of the act refers only to the duty to deduct tax and pay to government account. If there is any shortfall due to any difference of opinion as to the taxability of the item or the nature of the payments falling under various TDS provisions the assessee in default u/s 201 of the act and no disallowance can be made by invoking the provisions of section 40(a)(ia) of the act. 2. CIT vs S.K. Tekriwal, 361 ITR 432(Calcutta Hi .....

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under s 194J at 10 percent and disallowed expenses claimed by assessee-Held, this appeal was similar to issue involved for AY 2008-2009 and in that case against order of Commissioner of Income Tax (Appeals) deleting impugned addition under s 40A(ia), department had come up with appeal which was dismissed-Following precedent, order of Commissioner of Income Tax (Appeals) was upheld as issue was squarely covered in favour of assessee-Revenue s appeal dismissed. 4. TATA AIG GENERAL INSURANCE CO. LT .....

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ance Corporation of India vs. Asstt. CIT (2009) 125 TTJ (Mumbai) 779: (2009) 29 DTR (Mumbai)(Trib) 505 : (2009) 28 SOT 453 (Mumbai) followed 5. DCIT-11(2) Vs. Chandabhoy & Jassobhoy(17 TAXMANN.COM 158, Mumbai Bench) Business Expenditure-Disallowance under s. 40(a)(ia)- Payment made to consultants engaged by Chartered Accountants' firm-AO held payment made to consultants engaged by Chartered Accountants' firm are in nature of fees for professional services and accordingly provisions o .....

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ction of tax u/s 192 and in their individual assessments these payments were accepted as salary payments-Entire amount paid for 18 consultants is only an amount of ₹ 26,75,535/-, which indicates that they are in employment and not professional consultants-Assessee has deducted tax u/s 192-Hence, s. 40(a)(ia) also do not apply as the said provision can be invoked only in event of non- deduction of tax but not for lesser deduction of tax. 6. CIT-1 Vs. Ansal Land Mark Township Private Limited .....

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