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TMI Blog2020 (7) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... e-6(3), Mumbai (hereinafter referred to as ld. AO). 2. The first issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in confirming the disallowance made u/s.40(a)(ia) of the Act in the sum of Rs. 19,05,112/- on account of exhibition expenses paid to Idea House Pvt. Ltd. without deduction of tax at source. 3. We have heard rival submissions and perused the materials available on record. We find from the facts placed on record by the assessee that assessee had made payment to Idea House Pvt. Ltd total sum of Rs. 20,65,675/- which included supply of temporary furniture etc., to the tune of Rs. 19,05,112/- and for agency fees of Rs. 1,60,563/-. The said furnitures were erected in the stall taken in the exhibition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f payments were made by the assessee to various parties in the last 25 years without deduction of tax at source and hence the assessee was under bonafide belief that the said payments does not attract deduction of tax at source. The payments made in the earlier years were accepted by the Revenue and hence, the bonafide belief of the assessee that the said payments do not attract any TDS provisions cannot be doubted or faulted with. The ld. AR further submitted that the revenue had accepted the stand of the assessee in the scrutiny assessment proceedings for A.Y.2007-08 and 2009-10, copies of which orders are enclosed in pages 12 and 22 of the paper book respectively. He also placed reliance on the decision of the Hon'ble Jurisdictional High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or all assessment years. Hence, in our considered opinion, we hold that the reliance placed on the Hon'ble Jurisdictional High Court by the ld. AR would not advance the case of the assessee. 3.2. However, we find lot of force in the alternative argument advanced by the ld. AR that the entire payments made to Idea House Pvt. Ltd., had been duly disclosed by the payee in its income tax returns filed for A.Y.2010-11 which is also supported by a certificate under first proviso to Section 201(1) of the Act by the Chartered Accountant in the prescribed form and duly certifying that this sum of Rs. 20,65,675/- has been duly included in the accounts of the payee i.e. Idea House Pvt. Ltd., for the A.Y.2010-11. Hence, the assessee's case squarely fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee herein. Accordingly, ground No.1 raised by the assessee is allowed. 4. The next ground to be decided in this appeal is with regard to the action of the ld. CIT(A) in confirming the disallowance made by the ld. AO u/s.40(a)(ia) of the Act in the sum of Rs. 56,997/- on account of advertisement expenses incurred without deduction of tax at source. 4.1. We have heard rival submissions and perused the material available on record. We find that assessee had submitted that the payment is made to "The Hindu" newspaper for advertising for hiring staff. It was submitted that this payment was in the nature of one time payment and no contract exist with the newspaper and accordingly, the provisions of Section 194C of the Act would not be applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) was justified in confirming the disallowance of transport expenses made u/s.40(a)(ia) of the Act in the sum of Rs. 2,06,255/- paid without deduction of tax at source. 5.1. We have heard rival submissions and perused the materials available on record. We find that assessee had made payment to the following transporters:- * Sambhathe Carriers - Rs. 95,600/- (PAN -AGOPP6247J) * Gati Limited - Rs. 1,10,655/- (PAN - AADCG2096A) 5.2. Assessee submitted that since PAN was obtained from the respective transporters to whom payments were made, pursuant to the amendment brought in the provisions of Section 194C of the Act w.e.f. 01/10/2009, there was no requirement for the assessee payer to deduct tax at source once PAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Asst Year 2010-11 of the respective payees in the light of the second proviso of Section 40(a) (ia) r.w.s. 201(1) of the Act. We have already held that second proviso has already been held to be retrospective in operation by the decision of the Hon'ble Delhi High Court reported in 377 ITR 635 supra. We hold that if the payees have included the subject mentioned transaction in their income tax returns, then the assessee payer should not be treated as assessee in default and disallowance u/s.40(a)(ia) of the Act should be deleted in its hands. IF the subject mentioned transaction is not reflected in the income tax returns of the payees, then disallowance made in the hands of the assessee u/s 40(a)(ia) of the Act would remain in force. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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