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2017 (1) TMI 1030 - BOMBAY HIGH COURT

2017 (1) TMI 1030 - BOMBAY HIGH COURT - TMI - TDS u/s 194I or 194C - whether the Tribunal was justified in holding that the assessee rightly deducted tax under Section 194C? - Held that:- We find that both CIT(A) as well as the Tribunal have recorded a finding of fact that the specialized job which is outsourced to other studios is carried out by the personnel of those studios. The respondent-assessee or her team is not allowed to work with the machine/equipments in the other studios for the spe .....

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as justified in holding that the short deduction of tax does not attract disallowance under Section 40(a)(ia)? - Held that:- The view of the Tribunal that the payments made by the respondent-assessee to other studios (outsourced studios) for doing a specialized job is in the nature of a contract and falls under Section 194C of the Act for the purposes of tax deduction at source. In the above view, there is no short deduction of tax thus there is no occasion to examine and consider the question o .....

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ion of law for our consideration : (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the assessee rightly deducted tax under Section 194C? (ii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the short deduction of tax does not attract disallowance under Section 40(a)(ia) of the Act? 3. Regarding question no.(i): (a) The respondent-assessee is engaged in the busines .....

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contract and the tax deducted at source would be at 2% under Section 194C of the Act. The Assessing Officer did not accept the respondent-assessee's contention and held that Section 194I was applicable and in the absence of deduction of tax at source disallowed expenditure under Section 40(a)(ia) of the Act. (b) In appeal, the CIT(A) held that the activity of outsourcing of specialized jobs to the other studios done by the respondent-assessee was in the nature of contract. Therefore the tax .....

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