TMI Blog2017 (10) TMI 1631X X X X Extracts X X X X X X X X Extracts X X X X ..... ein all the receipts of licence fee paid by the assessee has been reflected in its income, therefore, no disallowance is called for - We find that this fact that the payment made by the assessee is part of DTC s receipts, has been duly noted by the Ld. CIT (A) - Once in the hands of the payee, receipts have been shown and income thereon has been assessed u/s 143(3), then no disallowance u/s 40(a)(ia) can be made in view of the second proviso to section 40(a)(ia) brought by the Finance Act 2012 w.e.f. 1.4.2013 which has held to be declaratory and curative in nature by cases including that of CIT vs. Ansal Land Mark Township (P) Ltd [ 2015 (9) TMI 79 - DELHI HIGH COURT] Thus the finding and observation of Ld. CIT (A) while deleting the said disallowance which has been reproduced above is affirmed and accordingly, ground raised by the revenue is dismissed. - ITA No.:- 6578/Del /2014 - - - Dated:- 25-10-2017 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For the Appellant : Department by: Shri S.S. Rana, CIT(DR) For the Department : Shri Pradeep Dinodia, CA Shri R.K. Kapoor, CA ORDER PER AMIT SHUKLA, J.M. The afor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0(a)(ia). Accordingly, the entire payment was disallowed by the AO. 3. In the first appeal besides various submissions made before the Ld. CIT (A), one of the crucial submissions made was that no tax was deductable u/s 194I in respect of 50% of payment of licence fee, because the same was paid to Municipal Corporation of Delhi (MCD) and MCD s income is exempt u/s 10(20), therefore, there was no liability to deduct TDS on payment made to MCD. It was brought on record from the terms of tender for award of contract for display of advertisement on DTC bus queue shelter/ time keeping booths, that 50% of the lease fee is payable to MCD and a separate cheque in favour of MCD has been presented to DTC and balance 50% is a lease fee cheque issued in favour of DTC. Hence both the authorities share the revenue in ratio of 50:50. In support copies of monthly bills raised by DTC as well as the forwarding letters of payment of licence fee were enclosed. Apart from that, it was further submitted that the payment made to DTC is already part of the receipts and if in the case of the payee (i.e. DTC) which is an undertaking of Govt. Of Delhi, assessment u/s 143(3) for the relevant assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. On the contention raised by the assessee that, since regular assessment in the respect of payee, i.e. DTC, has been completed u/s 143(3) much prior to the date of issuance of notice u/s 148, therefore, in view of the second proviso of section 40(a)(ia) no disallowance can be made, his relevant observation and finding reads as under :- 12.3. I have carefully considered all the arguments put forward by the appellant regarding the applicability of provisions u/s 40(a)(ia) of the Act in respect of outstanding amounts (payable), there are contradictory views from different High Courts and the CBDT has also issued a circular in this regard. The appellant's case finds support from the decisions of Hon'ble Courts relied upon by it. Without prejudice to appellant's this argument, the argument that the payee's (DTC) assessment has already been completed u/s 143(3) of the Act, wherein it has shown all the receipts in respect of license fees paid by the appellant. It is observed that the Hon'ble Jurisdictional High Court has held that second proviso to section 40(a)(ia) is curative and remedial in nature and for making the provision workable giving it a reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance u/s 40(a)(ia). Regarding second contention raised by the Ld. CIT (DR), he submitted that such a huge payment made to DTC towards advertisement fee is part of the receipt of DTC and once the assessment has been completed u/s 143(3) in the case of DTC at a huge loss, then there was no requirement for the assessee to deduct TDS on such payment. Therefore, Ld. CIT (A) has rightly accepted the assessee s contention on this score. In any case, now it is a settled law that second proviso to section 40(a)(ia) has been held to be retrospective from 1.4.2005 in view of the judgement of Hon ble Delhi High Court in the case of CIT vs. Ansal Land Mark Township (P.) Ltd. (2015) 377 ITR 635 (Delhi). 8. We have heard rival contentions and also perused the relevant finding given in the impugned order qua the issue raised before us. So far as the admissibility of additional evidence by the Ld. CIT(A) is concerned, we find that the very basis for making the payment is originating from the contract entered by the assessee with the DTC for display of advertisement on DTC on their bus queue shelters and time keeper booths. In the said contract itself, it has been agreed that 50% of the lease fee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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