TMI Blog2017 (1) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... ity on account of short deduction of TDS would not be recovered from the assessee. The assessee shall extend requisite cooperation to the AO by submitting complete particulars of the payees containing name, address, PAN No. and copies of invoices. - Decided in favour of assessee for statistical purposes. Payment for utilizing services of production houses - Held that:- Payments made to the production houses towards cost of production of film/advertisement were nothing but contract payments made by the assessee company in pursuance of the purchase orders, and therefore, these would fall within the purview of provisions of section 194C and not u/s 194J of the Act. Payment for AMC services - Held that:- These payments are within the purview of provisions of section 194C of the Act. We find that order of the Ld. CIT(A) is based upon proper reasoning and analysis of facts. Therefore we do not find any justification to interfere in the finding of Ld. CIT(A). Treating payments made towards car parking charges as rent under Section 194I instead of contract payment covered under Section 194C - Held that:- During the course of hearing before us, detailed arguments have been made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ftware require the services of highly professional and technical persons and cannot be done by non-qualified persons , therefore the payments fall within the ambit of section 194J of the Act. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not properly considering the CBDT's clarificatory circular No. 715 dated 08.08.1995, which clearly states that the payments made by advertising agency to even in a situation where such services are sub contracted, are liable for TDS u/s 194J of the I T Act, and where technical services are rendered, provision of section 194J is applicable even to normal maintenance contracts. 5. The appellant craves to leave to amend or alter any ground or add a new ground which may be necessary at the time of hearing of the case or thereafter. 6. The order of CIT(A), being erroneous be set aside and Ld A.O.'s order be restored. 4. Similarly, Cross Objection has been filed on the following grounds: 1. On the facts and in the circumstances of the case and in law, the Learned Commissioner or Income Tax (Appeal) CIT(A)') erred in confirming the action of Assessing Officer ('AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bbing charges warranted deduction of tax u/s 194J of the Act. Further, it was also held that tax was to be deducted u/s 194I of the Act on payment of parking charges. Lastly, the Ld. CIT(A) held that the assessee would not be considered as an assessee in default u/s 201 of the Act in case the payees have paid tax on the payment made to them. Both the parties have come in appeal before us for their respectful grievances against the order passed by the Ld. CIT(A). Ld. DR has relied upon the order of the AO. Whereas the Ld. counsel of the assessee has taken following arguments: (i) The assessee had made payment to production houses for production charges and the payments have not been made to individual persons for the individual services. Thus, payments have been made in pursuance to contract; therefore, TDS has rightly been deducted u/s 194C. Thus, Ld. CIT(A) has erred in bifurcating the payments in the two parts. All the payments should be put into the category of u/s 194C. (ii) The Ld. CIT(A) has held that assessee should not be considered as assessee in default u/s 201 of the Act in case payees have paid tax on the payments made to them. All the payees of the assessee are i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n with following observations: Section 191 provides that in the case of income in respect of which provision is not made under this chapter for deducting income tax at source and where income tax has not been deducted in accordance with the provision of this chapter, income tax shall be payable by the Assessee direct. Thus, both the conditions i.e. (i) in the case of income in respect of which provision is not made under chapter XVII for deducting income tax at the time of payment and ('ii) in case where income tax has not been deducted in accordance with the provisions of Chapter XVII the Income tax is payable by the Assessee direct. Section 191 thus re-enforces that primarily the liability of payment of income tax is on the person, who income is to be taxed as delineated under subsection (1) of section 4 and sub-section (2) of section 190. The explanation to Section 191 provides that where a deductor who was required to deduct income tax at source does not deduct or after deduction does not pay and where the Assessee has also failed to pay such tax directly then such person shall without prejudice to any other consequence be deemed to be an Assessee in default within the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. Ld. CIT(A) has already followed this view and accordingly directed the AO to verify these facts and exonerated the assessee from the liability of short fall under such cases. Under these circumstances, respectfully following aforesaid judgments we uphold the view taken by in this regard by Ld. CIT(A), and direct the AO to exercise his powers under the law to make requisite verification with the payees. If the payee is assessed with the tax department and has filed its income tax return, then liability on account of short deduction of TDS would not be recovered from the assessee. The assessee shall extend requisite cooperation to the AO by submitting complete particulars of the payees containing name, address, PAN No. and copies of invoices. Further, if the need arises, the assessee shall be free to demonstrate that the assessee had made the payments to production houses and not to the persons directly for availing technical services and shall also be free to raise all legal and factual issues to establish that TDS was deducted in accordance with law only. The AO shall also take into account all the facts of the case as well as the judgments as may be relied upon by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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