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TMI Blog2022 (4) TMI 1426X X X X Extracts X X X X X X X X Extracts X X X X ..... will get prize money according to the pre-determined rates, which is the combination of multiplying factor for each of the horse and the rank. The public can place their bets either at the totalizator or with the registered book makers who are licensed to bet in the race course. The assessee would be entitled to receive commission amount from totalizators and book makers. Accordingly, the assessee has accounted for only commission amount including totalizator tax in its books of account on the reasoning that its income consists of commission income only. Accordingly, the assessee did not account for betting amount paid by the punters and disbursement of prize money/dividend to them in its books of accounts on the reasoning that those transactions are diverted at source. It was also submitted that the punters who bet at the totalizators have not direct contact with the assessee and the betting tax payable on betting amount is collected and paid to the State Government under the Betting Tax Act. 3. The facts relating to AY 2009-10 are that the assessee filed its return of income for assessment year 2009-10 on 5.10.2009 declaring loss of Rs.1.77 crores, which was processed u/s 143(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessment year 2010-11 in ITA No.531/Bang/2014 and the Tribunal, vide its order dated 23.3.2017, has restored this issue to the file of the A.O. for examining it afresh in view of certain contentions made by the assessee. The Ld. A.R. submitted that the coordinate bench has restored the issue after considering the decision rendered by Hyderabad bench of Tribunal in the case of Hyderabad Race Club (supra). 5.2 We heard Ld. D.R. on this issue and perused the record. We notice that an identical issue has been examined by Hyderabad bench of Tribunal in the case of Hyderabad Race Club (supra) and the same has been decided against the assessee. However, the coordinate bench in the assessee's own case relating to assessment year 2010-11 has restored the issue to the file of the A.O, after considering the decision rendered by Hyderabad bench in the case ofHyderabad Race Club. The relevant discussions made by the coordinate bench in assessment year 2010-11 are extracted below:- 5.3 We notice that the decision rendered by the coordinate bench in the A.Y. 2010-11 has been followed in assessment year 2011-12 also in the assessee's own case in ITA No.1480/Bang/2017. Since a particular view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. The first item of this issue relates to subsidy amount of Rs.2,69,94,732/- disallowed by the A.O. u/s 40(a)(ia) of the Act. The assessee has provided different kinds of subsidies, which has been explained as under in its written submissions. The Ld A.R contended that none of these payments would be liable for deduction of tax at source under any of the provisions of the Act. 9.1 The Income Tax Act prescribes deduction of tax at source u/s 192 to 195 of the Act. The assessee would be liable to deduct tax at source only in respect of payments which are covered by above said sections. The case of the assessee is that it has paid subsidy which is in the form of either reimbursement of part of expenses or absorption of certain expenses in maintenance of horses, transportation and contribution to welfare funds. None of these payments would fall under sec. 192 to 195 of the Act requiring deduction of tax at source. We notice that the A.O., without pointing out the section under which the assessee would be liable to deduct tax at source in respect of above said payments, has simply disallowed the subsidy payments by invoking the provisions of section 40(a)(ia) of the Act. We notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is merit in the contention of the assessee that the above said contribution would not attract any of the TDS provisions. Accordingly, we set aside the order passed by the Ld. CIT(A) on this issue and direct the A.O. to delete this disallowance. 9.5 The Last item disallowed u/s 40(a)(ia) of the Act is dope testing charges. The assessee has offered following explanation in this regard:- 9.6 The Ld. A.R. submitted that this payment was actually made to Bangalore Turf Club in the form of reimbursement. He submitted that the dope test is carried out in Hong Kong (Outside India). Since the assessee does not have direct contact with the lab carrying out Dope test outside India, it has sent the samples to Bangalore Turf Club, which in turn, has sent the samples to Hongkong. The Ld. A.R. submitted that there is no liability to deduct TDS from these kind of reimbursements. The Ld. A.R. also submitted that even if it is considered for a moment that the assessee should be presumed to have made the payment directly to Hongkong company, yet no TDS is required to be deducted since the payment was made to a non-resident for services rendered outside India, whose income is not chargeable to tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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