Sh. Aakash Tah, Chandigarh V. ACIT, Chandigarh

ITA 1025/CHANDI/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68443 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 18-07-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 21-07-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1025/CHD/2010 ASSESSMENT YEAR: 2006-07 SH. AAKASH TAH, VS. THE ACIT, CIRCLE, CHANDIGARH CIRCLE- 3(1) CHANDIGARH, PAN NO. ADTPT2401Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI AKHILESH GUPTA DATE OF HEARING : 23/07/2013 DATE OF PRONOUNCEMENT : 26.08.2013 ORDER PER T.R.SOOD, A.M. THE APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A), CHANDIGARH DATED 07.05.2010. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS:- 1. THAT ORDER U/S 250(6) PASSED BY LD. COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH IS AGAINST LAW 2 AND FACTS ON THE FILE IN AS MUCH AS SHE WAS NOT JUSTIFIED TO UPHOLD THE ACTION OF THE LD. ASSESSING OFFICER IN DISALLOWING A SUM OF RS. 49,36,160/- BY RESORT TO PROVISIONS OF SECTION 40 A(IA). THAT SHE WAS FURTHER NOT JUSTIFIED TO UPHOLD DISALLOWANCE OF RS. 12,774/- OUT OF STAFF REFRESHMENT AND TRAVELING & CONVEYANCE. 3. GROUND NO.1 : AFTER HEARING BOTH THE PARTIES, WE FIND THAT DURING ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF ADVERTISI NG SERVICES IN THE NAME AND STYLE OF RAVE ADVERTISING & MARKETING AND DURING THE YEAR THE GROSS SALES WERE RS. 56,65,131/-. IT WAS FURTH ER NOTICED THAT ASSESSEE HAS SHOWN AN AMOUNT OF RS. 49,36,182.81 AS PURCHASES FROM RAM ADVERTISING SERVICE. THE ASSESSEE WAS ASKED TO SHOW THE DETAILS OF TAX DEDUCTED AT SOURCE IN RESPECT OF THESE PAYME NTS AND IN RESPONSE TO WHICH IT WAS STATED THAT NO TAX HAS BEEN DEDUCTE D. THEREAFTER, THE ASSESSING OFFICER ASKED A FURTHER QUERY THAT WHY SU CH PAYMENT SHOULD NOT BE DISALLOWED U/S 40(A)(IA) OF THE ACT. THE ASS ESSEES VIDE ITS REPLY DATED 5.11.2008 STATED AS UNDER:- SINCE PRINT / ELECTRONIC MEDIA PURCHASES ARE EXEMP T FORM TDS IN ACCORDANCE WITH CIRCULAR NO. 715 DATED 8.8.1995, NO AMOUNT OF TDS WAS DEDUCTED. ASSESSEE FURTHER SUBMITTED, IT IS PERTINENT TO MENTION HERE THAT RAM ADVERTISING SERVICE IN OUR CASE IS NOT WORKING AS AN ADVERTISING AGENCY FOR US RATHER THEY ARE WORKING A S MEDIA BUYING AGENCY (AOR) FOR US AND AS PER THE RUL ES OF ADVERTISING AGENCIES ASSOCIATION OF INDIA, THEY ARE 3 RESPONSIBLE FOR RAISING MEDIA BILLS ON US AND COLLE CTION OF MEDIA DUES FROM US AND FOR PAYMENT TO MEDIA. 4. THE ASSESSING OFFICER WAS NOT SATISFIED WITH THI S EXPLANATION AND OBSERVED THAT IN FACT THE AMOUNT SHOWN AS MEDIA PUR CHASES IS BASICALLY ADVERTISEMENT WORKS SUBCONTRACT AND ASSESSEE WAS LI ABLE TO TAX U/S 194C(2) OF THE ACT. IT WAS ALSO STATED BEFORE THE A SSESSING OFFICER THAT IN VIEW OF THE CIRCULAR NO. 715 OF THE BOARD D ATED 8.8.1995, THE TAX IS NOT REQUIRED TO BE DEDUCTED ON ELECTRONIC M EDIA PURCHASES. IN THIS RESPECT THE ASSESSING OFFICER OBSERVED AS UNDE R:- AS REGARDS ASSESSEE TAKING SHELTER OF CIRCULAR NO. 715 DATED 08.08.1995, THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE. THIS CIRCULAR CLEARLY STATES, TDS WOUL D APPLY WHEN A CLIENT MAKES PAYMENT TO AN ADVERTISEMENT AGE NCY (THE SAME(TDS) HAS ALREADY BEEN APPLIED BY THE CLIE NTS IN THIS CASE) AND NOT WHEN THE ADVERTISING AGENCY MAKE S PAYMENT TO THE MEDIA, WHICH INCLUDES BOTH PRINT & ELECTRONIC MEDIA. HOWEVER, TDS WOULD APPLY WHEN CLI ENT PAYMENTS ARE MADE DIRECTLY TO THE MEDIA. THIS CIR CULAR NOWHERE GIVES EXEMPTION FROM APPLICATION OF TDS PROVISIONS U/S 194 C(2) WHEN THE PAYMENTS ARE MADE BY CONTRACTOR TO THE SUBCONTRACTOR AS SHOWN BY THE FOL LOWING LLUSTRATION: CLIENTS (A) RAVE ADVERTISING & MARKETING (CONTRACTOR) (B) RAM ADVERTISING SERVICE (SUB-CONTRACTOR) (C) PRINT / ELECTRONIC MEDIA (D) 4 AS PER CIRCULAR 715, PROVISIONS OF TDS WOULD APPLY BETWEEN (A) AND (B) AND ACCORDINGLY HAS PROPERLY BEEN APPLIED BY THE CLIENTS WHILE MAKING THE PAYMEN TS FOR ADVERTISING. FURTHER, PROVISIONS OF TDS WOULD N OT APPLY BETWEEN (C) & (D) AND ACCORDINGLY (C) I.E. RA M ADVERTISING SERVICE HAS NOT APPLIED THESE PROVISION S WHILE MAKING PAYMENTS FOR ADVERTISING TO (D) I.E. PRINT / ELECTRONIC MEDIA. HOWEVER, IN THE CASE UNDE R CONSIDERATION CONTRACTOR (B) I.E. RAVE ADVERTISING & MARKETING HAS FAILED TO DEDUCT TAX AT SOURCE U/S 194C(2) WHILE MAKING PAYMENTS FOR ADVERTISING TO SUBCONTRACTOR (C) I.E. RAM ADVERTISING SERVICE. ASSESSEE HAS FURTHER CONTENDED THAT FOR HIM RAM ADVERTISING SERVICE IS WORKING AS MEDIA BUYING AGENCY (AOR) AS PER RULES OF ADVERTISING AGENCIES ASSOCIATION OF INDIA, THEREFORE SECTION 194 C IS NO T APPLICABLE AS PER CIRCULAR NO. 715. ASSESSEES CONTENTION IS NOT ACCEPTABLE AS ASSESSEE HAS NOTHIN G ON RECORD TO PROVE THAT RAM ADVERTISING SERVICE IS A MEDIA BUYING AGENCY FOR HIM AND EVEN IF IT IS ASSUMED TO BE TRUE THEN CIRCULAR NO. 715 NOWHERE MENTIONS THAT MEDIA BUYING AGENCY (AOR) TO BE TREATED AT PAR WITH MEDIA AS FAR AS APPLICABILITY O F PROVISIONS OF TDS U/S 194 C IS CONCERNED. 5. ANOTHER ARGUMENT WAS TAKEN THAT THE PROVISIONS O F SECTION 194C ARE NOT APPLICABLE BECAUSE THE ASSESSEES TURN OVER DOES NOT EXCEED RS. 40 LAKHS WAS REJECTED BECAUSE ACCORDING TO ASSESSIN G OFFICER THE GROSS RECEIPTS WERE MORE THAN RS. 40 LAKHS. WE ARE NOT D EALING WITH THIS ISSUE IN DETAILS BECAUSE THIS ARGUMENT WAS NOT PRES SED BEFORE US. 5 6. AGGRIEVED BY THIS ORDER, THE ASSESSEE FIELD AN APPEAL BEFORE THE CIT(A). IT WAS MAINLY STATED THAT RECEIPTS OF RAVE ADVERTISING & MARKETING WHICH IS PROPRIETARY CONCERN SHOWING RECE IPTS IN THE SHAPE OF COMMISSION WERE RS. 7,45,732/-, THEREFORE, BECAU SE OF THE PROVISIONS OF SUB SECTION 2 OF SECTION 194C, ASSESS EE WAS NOT COVERED BY THE PROVISIONS OF SECTION 44AB AND, THEREFORE, T HE PROVISION REGARDING DEDUCTION OF TAX WAS NOT APPLICABLE. THE LD. CIT(A) DID NOT ACCEPT THIS CONTENTION AND DISMISSED THE APPEAL OF THE ASSESSEE. 7. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT ASSESSEE WAS IN THE BUSINESS OF ADVERTISING AND MAR KETING AND WAS COLLECTING ASSIGNMENTS FROM VARIOUS CLIENTS WHICH W ERE PROCESSED BY THE ASSESSEE AND THEN ISSUED / BOOKED TO THE PRINT OR THE ELECTRONIC MEDIA. HOWEVER, THE ASSESSEE WAS NOT ACCREDITED AG ENT. AN ACCREDITED AGENT IS ALLOWED A CREDIT FACILITY FOR SIXTY DAYS. HE SUBMITTED THAT ASSESSEE MADE PAYMENT THROUGH THE ACCREDITED AGENCY I.E. RAM ADVERTISING AGENCY WHICH WAS OWNED BY ASSESSEES SO N. SINCE RAM ADVERTISING AGENCY SERVICES WAS AN ACCREDITED AGENC Y, THE ASSESSEE WAS ROUTING OR BOOKING ADVERTISEMENTS THROUGH THIS AGENCY. HE CONTENDED THAT AS PER CIRCULAR NO. 715 THERE WAS NO REQUIREMENT FOR DEDUCTION OF TAX ONCE SUCH ADVERTISEMENT WAS ROUTED THROUGH SUCH AGENCY. HE ALSO REFERRED TO THE DECISION OF THE IT AT BANGLORE BENCH A IN SANDS ADVERTISING COMMUNICATION (P) LTD VS D CIT(TDS), BANGLORE [2010] 37 SOT 179 (BANGLORE) WHEREIN IN TH E SIMILAR CIRCUMSTANCES, THE TAX WAS ALSO NOT DEDUCTIBLE. 6 8. ON THE OTHER HAND, LD. DR STRONGLY SUPPORTED THE ORDER OF THE CIT(A). 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFUL LY AND ARE UNABLE TO AGREE WITH THE SUBMISSIONS OF LD. COUNSEL FOR THE ASSESSEE. THE ASSESSING OFFICER HAS SOUGHT TO APPLY SECTION 1 94C (2) WHICH READS AS UNDER:- PAYMENTS TO CONTRACTORS AND SUB-CONTRACTORS. (2) ANY PERSON (BEING A CONTRACTOR AND NOT BEING A N INDIVIDUAL OR A HINDU UNDIVIDED FAMILY) RESPONSIBLE FOR PAYING ANY SUM TO ANY RESIDENT (HEREAFTER IN THIS SECTION REFERRED TO AS THE SUB-CONTRACTOR) IN PURSUANCE OF A CONTRACT W ITH THE SUB- CONTRACTOR FOR CARRYING OUT, OR FOR THE SUPPLY OF L ABOUR FOR CARRYING OUT, THE WHOLE OR ANY PART OF THE WORK UND ERTAKEN BY THE CONTRACTOR OR FOR SUPPLYING WHETHER WHOLLY OR P ARTLY ANY LABOUR WHICH THE CONTRACTOR HAS UNDERTAKEN TO SUPPL Y SHALL, AT THE TIME OF CREDIT OF SUCH SUM TO THE ACCOUNT OF TH E SUB- CONTRACTOR OR AT THE TIME OF PAYMENT THEREOF IN CAS H OR BY ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WH ICHEVER IS EARLIER, DEDUCT AN AMOUNT EQUAL TO ONE PER CENT OF SUCH SUM AS INCOME-TAX ON INCOME COMPRISED THEREIN: [ PROVIDED THAT AN INDIVIDUAL OR A HINDU UNDIVIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOVER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUSE (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANC IAL YEAR IN WHICH SUCH SUM IS CREDITED OR PAID TO THE ACCOUNT O F THE SUB- 7 CONTRACTOR, SHALL BE LIABLE TO DEDUCT INCOME-TAX U NDER THIS SUB-SECTION.] [EXPLANATION I.FOR THE PURPOSES OF SUB-SECTION (2 ), THE EXPRESSION CONTRACTOR SHALL ALSO INCLUDE A CONTRA CTOR WHO IS CARRYING OUT ANY WORK (INCLUDING SUPPLY OF LABOUR F OR CARRYING OUT ANY WORK) IN PURSUANCE OF A CONTRACT BETWEEN TH E CONTRACTOR AND THE GOVERNMENT OF A FOREIGN STATE OR A FOREIGN ENTERPRISE OR ANY ASSOCIATION OR BODY ESTABLISHED O UTSIDE INDIA.] [EXPLANATION II].FOR THE PURPOSES OF THIS SECTION , WHERE ANY SUM REFERRED TO IN SUB-SECTION (1) OR SUB-SECTION ( 2) IS CREDITED TO ANY ACCOUNT, WHETHER CALLED SUSPENSE A CCOUNT OR BY ANY OTHER NAME, IN THE BOOKS OF ACCOUNT OF THE P ERSON LIABLE TO PAY SUCH INCOME, SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE A ND THE PROVISIONS OF THIS SECTION SHALL APPLY ACCORDINGLY. ] [EXPLANATION III.FOR THE PURPOSES OF THIS SECTION , THE EXPRESSION WORK SHALL ALSO INCLUDE (A) ADVERTISING; (B) BROADCASTING AND TELECASTING INCLUDING PROD UCTION OF PROGRAMMES FOR SUCH BROADCASTING OR TELECASTING; (C) CARRIAGE OF GOODS AND PASSENGERS BY ANY MODE OF TRANSPORT OTHER THAN BY RAILWAYS; (D) CATERING. 10. THE ABOVE CLEARLY SHOWS THAT PROVISIONS OF TAX DEDUCTIONS ARE APPLICABLE ON THE WORK OF ADVERTISEMENT BECAUSE THE SAME IS INCLUDED UNDER EXPRESSION WORK BY EXPLANATION (3) WHICH DE FINES WORK. 8 FURTHER, THE PROVISIONS MAKE IT CLEAR THAT WHENEVER A PERSON BEING MAIN CONTRACTOR GETS SOME WORK DONE FROM THE SUB-CO NTRACTOR EVEN THEN THE PROVISION FOR TAX DEDUCTION WOULD BE APPLICABLE . 11. NOW IN CASE BEFORE US, ASSESSEE HAD SHOWN PURCH ASES OF ADVERTISING SERVICES AMOUNTING TO RS. 49,36,160.81 FROM M/S RAM ADVERTISING SERVICE WITHOUT ANY DEDUCTION OF TAX. THE ASSESSEE HAS BOOKED ADVERTISEMENTS FOR VARIOUS CLIENTS. IT WAS VEHEMENTLY ARGUED THAT SINCE ASSESSEE WAS NOT AN ACCREDITED AGENT, TH EREFORE, THE ADVERTISEMENT WAS ROUTED THROUGH M/S RAM ADVERTISIN G SERVICE. IT WAS EXPLAINED THAT ACCREDITED AGENCY RECEIVES CREDI T FOR A PERIOD OF 60 DAYS I.E. WHY ADVERTISEMENT WAS ROUTED THROUGH AN A CCREDITED AGENCY I.E. M/S RAM ADVERTISING SERVICE AND NO ADVERTISEME NT WORK WAS DONE BY M/S RAM ADVERTISING SERVICE. HOWEVER, TO A POINT ED QUERY, THE LD. COUNSEL ADMITTED THAT COPIES OF BILLS FROM RAM ADVE RTISING SERVICE ARE NOT AVAILABLE IN THE PAPER BOOK AND WERE NOT EVEN P RODUCED BEFORE THE ASSESSING OFFICER. THEREFORE, THERE IS NO EVIDENCE ON RECORD TO SHOW THAT NO ADVERTISING WORK WAS DONE BY M/S RAM ADVERT ISING SERVICE. OTHERWISE ALSO, IT TRANSPIRES DURING THE HEARING TH AT M/S RAM ADVERTISING SERVICE IS OWNED BY ASSESSEES SON AND THEREFORE, ASSESSEE SHOULD HAVE BEEN MORE CAREFUL TO ROUTE THE ADVERTIS EMENT WORK THROUGH HIS SON AND OBTAIN PROPER BILLS. THE ASSESSING OFFI CER HAS CATEGORICALLY GIVEN A FINDING THAT AMOUNT WAS DEBITED AS PURCHASE S FROM M/S RAM ADVERTISING SERVICE. ALTERNATIVELY IT IS THE SERVI CES WHICH CAN BE PURCHASED. 9 12. THE LD. COUNSEL HAD HEAVILY RELIED ON THE CIRCU LAR NO. 715 DATED 8.8.1995. THROUGH THIS CIRCULAR, BOARD HA S GIVEN CLARIFICATIONS TO THE VARIOUS REPRESENTATIONS MADE BY VARIOUS BUSI NESS GROUPS IN THE FORM OF QUESTION AND ANSWERS. THE ANSWER TO QUESTIO N NO.1 READS AS UNDER:- QUESTION 1 : WHAT WOULD BE THE SCOPE OF AN ADVERTI SING CONTRACT FOR THE PURPOSE OF SECTION 194C OF THE ACT ? ANSWER : THE TERM ADVERTISING HAS NOT BEEN DEFINE D IN THE ACT. DURING THE COURSE OF THE CONSIDERATION OF THE FINANCE BILL, 1995, THE FINANCE MINISTER CLARIFIED ON THE FLOOR OF THE HOUSE THAT THE AMENDED PROVISIONS OF T AX DEDUCTION AT SOURCE WOULD APPLY WHEN A CLIENT MAKES PAYMENT TO AN ADVERTISING AGENCY AND NOT WHEN ADVERTISING AGENCY MAKES PAYMENT TO THE MEDIA, WHIC H INCLUDES BOTH PRINT AND ELECTRONIC MEDIA. THE DEDUC TION IS REQUIRED TO BE MADE AT THE RATE OF 1 PER CENT. I T WAS FURTHER CLARIFIED THAT WHEN AN ADVERTISING AGENCY M AKES PAYMENTS TO THEIR MODELS, ARTISTS, PHOTOGRAPHERS, E TC., THE TAX SHALL BE DEDUCTED AT THE RATE OF 5 PER CENT AS APPLICABLE TO FEES FOR PROFESSIONAL AND TECHNICAL S ERVICES UNDER SECTION 194J OF THE ACT. 13. THE CAREFUL READING OF THE SAME WOULD CLEARLY S HOW THAT PROVISIONS OF TDS WOULD APPLY WHEN A CLIENT MAKES P AYMENT TO AN ADVERTISEMENT AGENCY. IT HAS ALSO BEEN CLARIFIED T HAT WHEN AN ADVERTISEMENT AGENCY MAKES PAYMENT TO THE MEDIA WHI CH INCLUDE BOTH PRINT AND ELECTRONIC MEDIA THEN PROVISIONS OF TAX DEDUCTIONS ARE NOT 10 APPLICABLE. ADMITTEDLY M/S RAM ADVERTISING SERVICE IS NOT PART OF MEDIA. IN FACT M/S RAM ADVERTISING SERVICE HAS BOO KED ADVERTISEMENTS FURTHER WITH OTHER MEDIA GROUP. SO, IT BECOMES A CASE OF ONE ADVERTISING AGENCY GETTING WORK DONE FROM TH E OTHER ADVERTISING AGENCY I.E. A SUB-CONTRACTOR. IT IS POSSIBLE THAT WHEN AN ADVERTISEMENT IS BOOKED, SOME PART OF THE WORK IS DONE BY ONE AGE NCY AND SOME PART IS DONE BY ANOTHER AGENCY. IN THE ABSENCE OF ANY EV IDENCE TO SHOW THAT M/S RAM ADVERTISING SERVICES HAS NOT PROVIDED ANY S ERVICES, THE ONLY CONCLUSION POSSIBLE IS THAT SUCH AGENCY HAD PROVIDE D SOME SERVICES, THEREFORE, THE PROVISIONS OF SECTION 194C(2) ARE CL EARLY APPLICABLE. 14. THE LD. COUNSEL HAD PLACED A VERY STRONG RELIAN CE IN THE CASE OF SANDS ADVERTISING COMMUNICATIONS (P) LTD V DCIT (TD S) (SUPRA). IN THAT CASE AT PARA 8.1.3 IT IS OBSERVED AS UNDER:- 8.1.3 THE ARGUMENT OF THE ASSESSEE WAS THAT THE SPADEWORK WITH REGARD TO ADVERTISEMENTS SUCH AS SKE TCH, MATERIAL, GETTING APPROVAL OF THE CLIENTS OF ADVERTISEMENT SUBSTANCE DEVISED AND DESIGNED WERE BEING PRECISELY DONE BY THE ASSESSEE AND THAT THE FINISHED MATERIALS (THE CONTENTS OF ADVERTISEMENTS) WERE ROUTED THROUGH TRISHUL TO THE MEDIA TO AVAIL ACCRED ITED FACILITY BEING ENJOYED BY TRISHUL. IN FACT, TRISHUL ROLE WAS CONFINED ONLY TO FORWARD THE ADVERTISEMENT MATE RIALS DEVISED BY THE ASSESSEE TO THE MEDIA. TO PUT IT IN A NUTSHELL, THE ASSESSEE HAD MADE USE OF TRISHUL ONLY FOR ROUTING THROUGH ITS ADVERTISEMENTS TO THE MEDIA. TH E COLLECTION OF PAYMENTS FROM THE CLIENTS (THE ADVERT ISER) 11 WAS THE JOB OF THE ASSESSEE. WHILE MAKING THE PAYME NT TO THE ASSESSEE BEING THE ADVERTISEMENT CHARGES, THE C LIENT (THE ADVERTISER) SHALL EFFECT THE TDS. THUS, THE ADVERTISEMENT CHARGES HAVE SINCE BEEN SUFFERED TDS WHEN THE CLIENTS MADE PAYMENTS TO THE ASSESSEE. TRI SHUL HAD INDEED ACTED AS A LIAISON BETWEEN THE ASSESSEE AND THE MEDIA FOR WHICH IT HAD RETAINED 3 PER CENT DISC OUNT EXTENDED BY THE MEDIA BECAUSE IT WAS ACCREDITED ADVERTISING AGENCY. 15. THE ABOVE MAKES IT CLEAR THAT IN THAT CASE OF T HE SPADE WORK WAS DONE BY THE ASSESSEE HIMSELF AND THE FINISHED PRODU CT WAS ROUTED THROUGH M/S TRISHUL. FURTHER, IN THAT CASE M/S TR ISHUL WAS AN AAA ACCREDITED AGENCY. IN THE CASE BEFORE US THERE IS NO EVIDENCE TO SHOW THAT ASSESSEE IS NOT AN ACCREDITED AGENCY AND ONLY M/S RAM ADVERTISING SERVICE IS THE ACCREDITED AGENCY. THER E IS NOT AN IOTA OF EVIDENCE TO SHOW THAT ASSESSEE HAS DONE ALL THE SPA DE WORK AND M/S RAM ADVERTISING SERVICE HAS NOT DONE ANYTHING. IN THE ABSENCE OF SUCH EVIDENCE THE DECISION IN THE CASE OF SANDS ADV ERTISING COMMUNICATIONS (P) LTD V DCIT (TDS) (SUPRA) WOULD N OT BE APPLICABLE IN THESE CIRCUMSTANCES. WE FIND NOTHING WRONG WITH THE ORDER OF LD. CIT(A) AND CONFIRM THE SAME. 16. GROUND NO.2: DURING THE ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER DISALLOWED 20% OF THE STAFF REFRESHMENT AND TRAVELLING & CONVEYANCE EXPENSES BY OBSERVING THAT ELEMENT OF PE RSONAL USAGE CANNOT BE RULED OUT. ON APPEAL, DISALLOWANCE WAS C ONFIRMED BY THE CIT(A). 12 17. BEFORE US, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE GROUND OF APPEAL AND ON THE OTHER HAND, THE LD. DR SUPPORTED THE ORDER OF CIT(A). AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT DISALLOWANCE SEEMS TO HAVE BEEN MADE ON ADHOC BASIS . AT THE SAME TIME, NO DETAILS HAVE BEEN FILED BY THE ASSESSEE BE FORE US TO EXAMINE WHETHER ANY PERSONAL EXPENDITURE CAN BE SAID TO HAV E BEEN INCURRED. THEREFORE, IN THE TOTALITY OF THE CIRCUMSTANCES, WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTRICT THE DISALLOWANCE TO RS. 5000/- 18. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.08.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 26 TH AUGUST, 2013 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR TRUE COPY BY ORDER ASSISTANT REGISTRAR