M/s Sowbhyaga Media Limited, Hyderabad V. ITO,Ward 15(2), Hyderabad

ITA 139/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87304 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: V RAGHAVENDRA RAO
• Keywords: Opportunity of being heard; Additional evidence
• Section: 133A; 194C; 201(1); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO. 143 & 139/HYD/2014 ASSESSMENT YEARS 2008-09 & 2009-2010 M/S. SOWBHYAGYA MEDIA LIMITED, HYDERABAD. PAN AADCS1450Q VS. THE INCOME TAX OFFICER WARD-15(2) HYDERABAD (APPLICANT) (RESPONDENT) FOR ASSESSEE : MR. V. RAGHAVENDRA RAO FOR REVENUE : MR. RAJAT MITRA DATE OF HEARING : 13.01.2015 DATE OF PRONOUNCEMENT : 18.02.2015 ORDER PER B. RAMAKOTAIAH, A.M. THESE TWO APPEALS BY ASSESSEE ARE AGAINST THE SEPARATE ORDERS OF LD. CIT(A)-II, HYDERABAD BOTH DA TED 20.11.2013 PERTAINING TO A.YS. 2008-09 AND 2009-10. AS THE ISSUES ARE COMMON, THESE APPEALS ARE TAKEN-UP FOR D ISPOSAL IN THE COMBINED ORDER FOR THE SAKE OF CONVENIENCE. ITA.NO.143/HYD/2014 : 2. ISSUES ARISING IN THE PRESENT APPEAL ORIGINATED FROM AN ORDER PASSED UNDER SECTION 201(1) AND 201(1 A) OF THE ACT. ASSESSEE HAS RAISED SEVEN GROUNDS. GROUND NOS. 1 AND 7 ARE GENERAL IN NATURE. HENCE, DO NOT REQUIRE SPECIF IC ADJUDICATION. IN GROUND NOS. 2 AND 3 ASSESSEE HAS C HALLENGED THE DECISION OF THE LD. CIT(A) IN SETTING ASIDE THE ISSUE OF APPLICABILITY OF SECTION 201(1) IN RESPECT OF PAYME NTS MADE OF 2 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. RS.53 LAKHS TO GEMINI LABS AND RS.49,000 TO M/S. M. M. SRILEKHA. 3. BRIEFLY THE FACTS ARE, ASSESSEE COMPANY IS ENGA GED IN THE BUSINESS OF PRODUCTION OF FILMS AND T.V. SER IALS. A SURVEY UNDER SECTION 133A WAS CONDUCTED IN THE BUSI NESS PREMISES OF THE ASSESSEE ON 27.01.2009 TO VERIFY TD S COMPLIANCE. ON VERIFICATION OF THE INFORMATION SUBM ITTED BY ASSESSEE POST-SURVEY, IT WAS FOUND BY A.O. THAT ASS ESSEE HAD DEBITED AUDIT FEES OF RS.1,12,360, PROFESSIONAL CHA RGES OF RS.12,42,257 WITHOUT DEDUCTING TAX AT SOURCE. HE AL SO NOTED THAT ASSESSEE DEBITED EXPENDITURE FOR FILM PRODUCTI ON OF RS.2,13,37,083 OUT OF WHICH ASSESSEE MADE TDS ON PA YMENTS OF RS.1,27,26,641 BUT DID NOT DEDUCT TAX AT SOURCE ON PAYMENTS OF RS.86,10,442 THOUGH THE PROVISIONS OF S ECTION 194J ARE CLEARLY ATTRACTED TO SUCH PAYMENTS. AS ALL EGED BY THE A.O., THOUGH, ASSESSEE WAS ASKED TO EXPLAIN WHY TDS WAS NOT MADE BUT THERE WAS NO COMPLIANCE FROM THE ASSESSEE. ACCORDINGLY, A.O. TREATING THE ASSESSEE AS ASSESSEE IN DEFAULT PASSED AN ORDER DEMANDING TAX OF RS.10,26,401 UNDER SECTION 201(1) AND INTEREST OF RS.4,25,956 UNDER SECTION 20 1(1A) TOTALING TO RS.14,52,357. 4. BEING AGGRIEVED OF THE ORDER SO PASSED, ASSESSE E PREFERRED APPEAL BEFORE THE LD. CIT(A). BEFORE THE FIRST APPELLATE AUTHORITY IT WAS SUBMITTED BY THE ASSESSEE THAT AS FAR AS PAYMENTS OF RS.86,10,442 IS CONCERNED, THEY ARE NOT LIABLE TO TDS BECAUSE OF THE VERY NATURE OF EXPENSES LIKE BOA RDING AND LODGING, COSTUME, PURCHASES, CENSOR CHARGES ETC., A ND MANY OF THE PAYMENTS WERE FAR BELOW THRESHOLD LIMITS PRESCR IBED FOR DEDUCTING TDS. ASSESSEE ALSO SUBMITTED THE DETAILS OF PAYMENTS MADE. ON THE BASIS OF SUBMISSIONS MADE BY THE 3 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. ASSESSEE LD. CIT(A) CALLED FOR A REMAND REPORT FROM THE A.O. AFTER RECEIVING THE REMAND REPORT OF THE A.O. AND E XAMINING ASSESSEES REPLY ON SUCH REMAND REPORT, LD. CIT(A) NOTED THAT PROCESSING CHARGES OF RS.53 LAKH WAS PAID TO GEMINI LABORATORIES LTD., ON WHICH THE ASSESSEE DID NOT DE DUCT TAX. IT WAS SUBMITTED BY THE ASSESSEE THAT TAX WAS NOT DEDU CTED AS GEMINI LABOROTORIES LTD., HAVE INCLUDED THE AMOUNT AS THEIR INCOME AND PAID TAXES THEREON. THEREFORE, AS PER TH E RATIO OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE O F HINDUSTAN COCA COLA BEVERAGES LIMITED 293 ITR 226 N O LIABILITY UNDER SECTION 201(1) CAN BE FASTENED ON T HE ASSESSEE. TO PROVE THIS CONTENTION, ASSESSEE ALSO SUBMITTED A CERTIFICATE FROM A CHARTERED ACCOUNTANT IN FORM 26A WHEREIN IT WAS STATED THAT THE PAYEE HAS OFFERED THE SAID AMOUNT A S INCOME AND PAID THE TAXES THEREON. LD. CIT(A) AFTER CONSID ERING THE SUBMISSIONS OF THE ASSESSEE AND VERIFYING THE MATER IAL ON RECORD OBSERVED THAT THE CERTIFICATE IN FORM 26A GI VEN BY THE CHARTERED ACCOUNTANT IS DEFECTIVE. HENCE, CANNOT B E RELIED UPON. THOUGH, SHE NOTED THE FACT THAT THE RETURN OF INCOME FILED BY GEMINI LABORATORIES WAS ALSO SUBMITTED BEF ORE HER BUT SHE NEVERTHELESS DIRECTED THE A.O. TO VERIFY WHETHE R RS.53 LAKHS WAS ACCOUNTED FOR BY GEMINI LABORATORIES OR N OT AND DECIDE ACCORDINGLY. AS FAR AS PAYMENT OF RS.49,000 TO MS. M.M. SRILEKHA IS CONCERNED, THE LD. CIT(A) ALSO ISS UED SIMILAR DIRECTION TO THE A.O. TO VERIFY WHETHER THE SAID PA YEE HAS OFFERED THE SAID AMOUNT AS INCOME AND DECIDE IT ACC ORDINGLY. 4.1. LEARNED A.R. SUBMITTED BEFORE US, THOUGH BEFO RE THE FIRST APPELLATE AUTHORITY ASSESSEE HAS FURNISHE D ALL DOCUMENTARY EVIDENCES TO SHOW THAT THE PAYMENTS MAD E TO GEMINI LABORATORIES ARE NOT COVERED BY TDS PROVISIO NS BUT LD. 4 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. CIT(A) WITHOUT PROPERLY APPRECIATING THE EVIDENCES HAS SET ASIDE THE ISSUE TO THE FILE OF A.O. LEARNED A.R. SU BMITTED THAT UNDER THE PROVISIONS OF THE ACT, LD. CIT(A) HAS NO POWER TO SET ASIDE. HOWEVER, LEARNED A.R. SUBMITTED THAT THE A.O . MAY BE DIRECTED TO DECIDE THE ISSUE WITHIN A STIPULATED TI ME PERIOD. 5. LEARNED D.R. SUBMITTED BEFORE US THAT PRIMARY LIABILITY IS ON THE ASSESSEE TO DEDUCT TAX AT THE T IME OF PAYMENT. WHETHER THE PAYEE OFFERS IT AS INCOME OR N OT IS NOT THE CONCERN OF ASSESSEE AS HE HAS TO COMPLY TO THE STATUTORY PROVISIONS. THEREFORE, IN THE GIVEN CIRCUMSTANCES, THE DIRECTION OF THE LD. CIT(A) IS APPROPRIATE. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIALS ON RECORD. AT THE TIME OF HEARING BOTH THE PARTIES AGREED THAT THE A.O. MAY BE DIRECT ED TO DECIDE THE ISSUE WITHIN A SPECIFIC TIME PERIOD. AS CAN BE SEEN FROM THE FACTS ON RECORD, A.O. RAISED THE DEMAND ON THE GROU ND THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE ON THE PAYM ENTS MADE. HOWEVER, BEFORE THE FIRST APPELLATE AUTHORITY A PLEA WAS TAKEN BY THE ASSESSEE THAT THE CONCERNED PAYEES HAV E OFFERED THE AMOUNTS RECEIVED BY THEM AS THEIR INCOME OF THE RELEVANT ASSESSMENT YEAR. A CERTIFICATE FROM THE CHARTERED A CCOUNTANT WAS ALSO FILED CERTIFYING THE AFORESAID FACT. THE L D. CIT(A) AFTER CONSIDERING THIS ASPECT AND KEEPING IN VIEW THE RAT IO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUST AN COCA COLA BEVERAGES LTD., (SUPRA), DIRECTED THE A.O. TO VERIFY WHETHER THE CONCERNED PAYEES HAVE OFFERED THE AMOUN T RECEIVED BY THEM AS INCOME OF THE RELEVANT ASSESSME NT YEAR. IN OUR VIEW, THE DIRECTION BY THE LD. CIT(A) TO VERIFY THIS ASPECT CANNOT BE FAULTED. HOWEVER, WE DIRECT THE A.O. TO V ERIFY THE INCOME TAX PARTICULARS OF THE CONCERNED PAYEES AND DECIDE THE 5 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. MATTER WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF THIS ORDER AFTER AFFORDING DUE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. THIS GROUND IS CONSIDERED TO BE ALLOWED F OR STATISTICAL PURPOSES. 7. IN GROUND NOS. 4 AND 5 ASSESSEE HAS CHALLENGED THE DEMAND RAISED UNDER SECTION 201(1) OF THE ACT I N RESPECT OF PROFESSIONAL CHARGES OF RS.8,24,762 AND DEMAND RAIS ED UNDER SECTION 201(1A) IN RESPECT OF CONSULTANCY CHARGES O F RS.4,17,465. BEFORE THE FIRST APPELLATE AUTHORITY, IT WAS SUBMITTED BY THE ASSESSEE THAT THE A.O. WHILE HOLDI NG THAT TAX WAS NOT DEDUCTED ON THE PROFESSIONAL CHARGES OF RS. 8,24,762 FAILED TO NOTICE THAT SOME OF THE PAYMENTS ARE LESS THAN RS.20,000. HENCE, TDS PROVISIONS ARE NOT APPLICABLE . IN RESPECT OF REST OF THE PAYMENTS TAX WAS DEDUCTED AN D IT FORMS PART OF THE AMOUNT OF RS.1,27,26,641. SIMILARLY, WI TH REGARD TO PROFESSIONAL CHARGES OF RS.4,17,765 IT WAS SUBMITTE D BY THE ASSESSEE THAT SOME OF THE PAYMENTS ARE LESS THAN RS .20,000 AND ON THE BALANCE PAYMENTS TAX HAS BEEN DEDUCTED A ND IT FORMS PART OF THE AMOUNT OF RS.1,27,26,641. LD. CIT (A), HOWEVER, DID NOT FIND MERIT IN SUCH CONTENTION OF T HE ASSESSEE BY OBSERVING THAT NO DETAILS WERE SUBMITTED BY THE ASSESSEE. 8. LEARNED A.R. REITERATING THE SUBMISSIONS MADE BEFORE THE FIRST APPELLATE AUTHORITY SUBMITTED BEFO RE US, SOME OF THE PAYMENTS OUT OF THE PROFESSIONAL CHARGES OF RS.8,24,062 AND CONSULTANCY CHARGES OF RS.4,17,465 WERE BELOW R S.20,000. HENCE, NO TAX WAS DEDUCTED AT SOURCE. HOWEVER, ON A LL THE PAYMENTS EXCEEDING RS.20,000 ASSESSEE HAS DEDUCTED TAX AT SOURCE. TO JUSTIFY SUCH CLAIM, LEARNED A.R. SUBMITT ED COPIES OF THE CERTIFICATES IN FORM NO.16A ISSUED TO THE PAYEE S CONTAINING THE PAYMENT PARTICULARS AS WELL AS DATE OF PAYMENT, DATES OF 6 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. REMITTANCES INTO GOVERNMENT ACCOUNT WITH CORRESPOND ING CHEQUE NUMBERS. LEARNED A.R. ALSO SUBMITTED THE DET AILS OF PAYMENTS WHICH ARE LESS THAN RS.20,000. IN A SEPARA TE PETITION, LEARNED A.R. PRAYED FOR ADMITTING THESE E VIDENCES AS ADDITIONAL EVIDENCES WHICH WERE SUBMITTED IN THE PA PER BOOK. 9. LEARNED D.R. ON THE OTHER HAND HAS SUBMITTED THAT AS NO EVIDENCES WERE PRODUCED BEFORE THE A.O. OR FIRST APPELLATE AUTHORITY, ASSESSEES CLAIM WAS NOT CONSI DERED. HOWEVER, HE SUBMITTED THAT THE EVIDENCE NOW PRODUCE D BY THE ASSESSEE CAN BE VERIFIED BY THE A.O. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PART IES AND PERUSED MATERIALS ON RECORD. IT IS THE CLAIM OF THE ASSESSEE NOT ONLY BEFORE THE FIRST APPELLATE AUTHORITY BUT A LSO BEFORE US THAT MANY OF THE PAYMENTS CONSTITUTING THE PROFESSI ONAL CHARGES OF RS.8,24,762 AND CONSULTANCY CHARGES OF RS.4,17,465 ARE LESS THAN RS.20,000. HENCE, THERE I S NO REQUIREMENT FOR DEDUCTION OF TAX AT SOURCE. IT IS A LSO THE CLAIM OF THE ASSESSEE THAT ON ALL OTHER PAYMENTS EXCEEDIN G RS.20,000 ASSESSEE HAS COMPLIED TO THE TDS PROVISIONS BUT DUE TO SOME REASON OR OTHER HE COULD NOT PRODUCE THE EVIDENCES BEFORE THE A.O. OR FIRST APPELLATE AUTHORITY. IN SUPPORT OF SU CH CLAIM, ASSESSEE HAS SUBMITTED CERTIFICATES IN FORM NO.16A CONTAINING THE PAYMENT PARTICULARS, DATES OF REMITTANCE OF TDS INTO THE GOVERNMENT ACCOUNT, CORRESPONDING CHEQUE NUMBERS ET C., IN OUR VIEW, THE EVIDENCES PRODUCED BY THE ASSESSEE RE QUIRES TO BE CONSIDERED BEFORE DECIDING WHETHER THE ASSESSEE CAN BE TREATED AS AN ASSESSEE IN DEFAULT FOR NOT DEDUCTING TAX AT SOURCE WITH REGARD TO AFORESAID PAYMENTS. HOWEVER, AS ASSESSEES CLAIM REQUIRES VERIFICATION WITH REFEREN CE TO ADDITIONAL EVIDENCES WHICH WERE SUBMITTED FOR THE F IRST TIME 7 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. BEFORE THIS FORUM, WE CONSIDER IT APPROPRIATE TO RE MIT THE MATTER BACK TO THE FILE OF A.O. FOR NECESSARY VERIF ICATION AND DECIDING THE MATTER AFRESH AFTER AFFORDING DUE OPPO RTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS N O.4 AND 5 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 11. GROUND NO.6 RELATES TO CALCULATION OF INTEREST UNDER SECTION 201(1A). LEARNED A.R. SUBMITTED BEFOR E US THAT THE METHOD OF CALCULATION OF INTEREST ADOPTED BY TH E A.O. BY ESTIMATING ON THE BASIS OF MONTH-WISE AVERAGE PAYME NTS IS AGAINST THE STATUTORY PROVISIONS. 12. LEARNED D.R. HOWEVER, SUPPORTED THE ORDER OF T HE A.O. AND LD. CIT(A). 13. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIALS ON RECORD. IN OUR VIEW, U LTIMATELY THE INTEREST UNDER SECTION 201(1A) IS TO BE COMPUTE D ON THE BASIS OF TAX DEMAND, IF ANY, UNDER SECTION 201(1) B Y TREATING THE ASSESSEE AS AN ASSESSEE IN DEFAULT OF THE ACT. AS WE HAVE REMITTED THE ISSUE RELATING TO APPLICABILITY OF TDS PROVISIONS ON THE PAYMENTS WHICH WERE SUBJECT MATTER OF APPEAL IN GROUNDS NO. 2 TO 5, IT WILL BE PREMATURE TO DECIDE THIS ISS UE AT THIS STAGE. HOWEVER, WE DIRECT THE A.O. TO COMPUTE THE I NTEREST UNDER SECTION 201(1A) STRICTLY IN COMPLIANCE WITH T HE STATUTORY PROVISIONS. GROUND NO.6 IS ACCORDINGLY DISPOSED OF. 14. IN THE RESULT, ITA.NO.143/HYD/2014 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. ITA.NO.139/HYD/2014 : (A.Y.2009-2010) 15. THIS APPEAL OF THE ASSESSEE IS ALSO CONCERNING DEMAND RAISED UNDER SECTION 201(1) AND 201(1A). ASS ESSEE HAS RAISED 8 GROUNDS IN THIS APPEAL. GROUNDS NO. 1 AND 8 BEING GENERAL IN NATURE, DO NOT REQUIRE ANY SPECIFIC ADJU DICATION. 16. GROUND NO.2 WITH ITS SUB-GROUNDS IS WITH REGAR D TO CONFIRMATION OF DEMAND OF RS.28,01,307. BRIEFLY THE FACTS ARE, THE A.O. WHILE VERIFYING ASSESSEES COMPLIANCE TO TDS PROVISIONS NOTICED THAT DURING THE RELEVANT PREVIOU S YEAR ASSESSEE HAS DEBITED ADVERTISEMENT AND PUBLICITY EX PENSES OF RS.28,01,307 BUT HAS NOT DEDUCTED TAX AT SOURCE. TH E A.O. THEREFORE, PASSED ORDER RAISING DEMAND UNDER SECTIO N 201(1) AND 201(1A) OF THE ACT. ASSESSEE CHALLENGED THE DEM AND RAISED BEFORE THE FIRST APPELLATE AUTHORITY. IT WAS SUBMIT TED BEFORE THE LD. CIT(A) THAT NO TAX IS DEDUCTIBLE ON THE PAYMENT S MADE TO ADVERTISING AGENCIES. THE LD. CIT(A) HOWEVER, DID N OT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND SHE OBSERVED THAT THE ASSESSEE HAS INCURRED THE EXPENDITURE TOWARDS ADVER TISING AND PUBLICITY. HOWEVER, NO DETAILS WERE SUBMITTED ON TH E ITEMS OF EXPENDITURE TOWARDS ADVERTISING AND PUBLICITY EITHE R BEFORE THE A.O. OR DURING THE APPEAL PROCEEDINGS. SHE FURTHER NOTED THAT AS PER SECTION 194(7)(IV) THE DEFINITION OF WORK IN CLUDES ADVERTISING. THEREFORE, ASSESSEE IS REQUIRED TO DED UCT TAX AT SOURCE ON SUCH PAYMENTS. ACCORDINGLY, LD. CIT(A) CO NFIRMED THE DEMAND OF RS.28,01,307. 17. LEARNED A.R. SUBMITTED BEFORE US THAT ASSESSEE HAS ENGAGED SIRI MEDIA P. LTD., FOR ADVERTISING AND PUBLICITY OF THE MOVIES ON BEHALF OF THE ASSESSEE. THEREFORE, SI RI MEDIA P. LTD., EXECUTED WORK OF ADVERTISING AND PUBLICITY FO R THE 9 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. ASSESSEE. IT WAS SIRI MEDIA P. LTD., WHO ENGAGED CE RTAIN PARTIES FOR ADVERTISING AND PUBLICITY AND DEDUCTED TAX AT S OURCE FROM THE PAYMENTS MADE TO THEM. CERTIFICATES IN FORM NO. 16A WERE ISSUED BY SIRI MEDIA P. LTD., TO THE PAYEES. THE LE ARNED A.R. IN THIS CONTEXT REFERRED TO THE LEDGER ACCOUNT OF PAYM ENTS MADE TO SIRI MEDIA P. LTD., AND ALSO FORM 16A ISSUED BY SIRI MEDIA P. LTD., TO THE PAYEES CONTAINING DATES OF DEDUCTIO N OF TDS, REMITTANCE IN GOVERNMENT ACCOUNT WITH CHEQUE NO. LE ARNED A.R. SUBMITTED AT THE TIME OF PROCEEDING BEFORE THE LD. CIT(A) THESE EVIDENCES COULD NOT BE PRODUCED BECAUSE THE A CCOUNTING STAFF COULD NOT BRING THE FACT OF SIRI MEDIA P. LTD ., HAVING EFFECTED TDS ON THE PAYMENTS TO THE PARTIES TAKING UP THE JOB OF ADVERTISING AND PUBLICITY. LEARNED A.R. THEREFOR E, REQUESTED FOR TREATING THE EVIDENCE SUBMITTED AS ADDITIONAL E VIDENCE. 18. LEARNED D.R. SUBMITTED BEFORE US THAT SINCE TH E ASSESSEE COULD NOT FURNISH ANY DETAILS WITH REGARD TO PAYMENTS MADE, LD. CIT(A) CONFIRMED THE DEMAND. 19. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIALS ON RECORD. IT IS THE CLAI M OF THE ASSESSEE BEFORE US THAT ASSESSEE HAS NOT INCURRED T HE EXPENDITURE TOWARDS ADVERTISING AND PUBLICITY DIREC TLY BUT IT WAS SIRI MEDIA P. LTD., WHO IS THE DISTRIBUTOR AND HAS MADE THE PAYMENTS ON BEHALF OF THE ASSESSEE. IT IS ALSO THE CONTENTION OF THE ASSESSEE THAT SIRI MEDIA P. LTD., HAS DEDUCTED TAX AT SOURCE ON SUCH PAYMENTS MADE TO THE PAYEES TOWARDS ADVERTISING AND PUBLICITY. IN THIS CONTEXT, HE HAS PRODUCED BEFORE US THE TDS CERTIFICATES AND FORM 16A AND HAS REQUESTED FOR TREATING THEM AS ADDITIONAL EVIDENCE. AS THESE EVIDENCES WERE NOT PRODUCED EITHER BEFORE THE A.O. OR LD. CIT(A) AND HAS BEEN SUBMITTED BEFORE US FOR THE FIR ST TIME, IN 10 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. THE INTEREST OF JUSTICE, WE CONSIDER IT APPROPRIATE TO REMIT THE MATTER BACK TO THE FILE OF A.O. TO VERIFY ASSESSEE S CLAIM WITH REFERENCE TO ADDITIONAL EVIDENCE PRODUCED AND DECID E THE MATTER, AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. GROUND NO.2 IS ALLOWED FOR STATISTICAL PU RPOSES. 20. THE GRIEVANCE OF THE ASSESSEE IN GROUND NO.3 A ND ITS SUB-GROUNDS ARE, THE LD. CIT(A) SHOULD NOT HAVE SET ASIDE THE ISSUE RELATING TO TDS ON EQUIPMENT HIRE CHARGES OF RS.3,50,000/- PAID TO M/S. PARADE INSTEAD OF DECIDI NG IT HERSELF. 21. BRIEFLY THE FACTS ARE, DURING THE RELEVANT PRE VIOUS YEAR IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE H AD PAID AN AMOUNT OF RS.3,50,000 TOWARDS EQUIPMENT HIRE CHARGE S TO M/S. PARADE. SINCE THE ASSESSEE HAD NOT DEDUCTED TA X AT SOURCE WHILE MAKING SUCH PAYMENT, THE A.O. RAISED D EMAND UNDER SECTION 201(1) OF THE ACT. BEING AGGRIEVED, A SSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). LD. CIT(A) FOLLOWING THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGES LIMITED 293 ITR 226 D IRECTED THE A.O. TO VERIFY WHETHER THE PAYEE HAS OFFERED TH E AMOUNT RECEIVED AS INCOME IN THE RELEVANT PREVIOUS YEAR AN D ACCORDINGLY, DECIDE THE ISSUE. 22. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PART IES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. LEARNED A.R. SUBMITTED BEFORE US THAT AS THE LD. CIT(A) HAS NO POWER TO SET ASIDE UNDER THE PROVISIONS OF THE ACT, THE O RDER PASSED IS NOT CORRECT. LEARNED A.R. SUBMITTED THAT LD. CIT(A) COULD HAVE GOT THE FACT OF OFFERING OF INCOME BY THE PAYEE VER IFIED THROUGH THE A.O. AND DECIDED THE ISSUE HERSELF. HOWEVER, LE ARNED A.R. 11 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. SUBMITTED THAT A SPECIFIC DIRECTION MAY BE GIVEN TO THE A.O. TO DECIDE THE ISSUE WITHIN A FIXED TIME LIMIT. 23. LEARNED D.R. ON THE OTHER HAND RELIED ON THE ORDERS OF THE A.O. AND LD. CIT(A). 24. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE T O THE FACT THAT ASSESSEE HAS PAID THE AMOUNT OF RS.3,50,000 TO WARDS EQUIPMENT HIRE CHARGES WITHOUT DEDUCTING ANY TAX. I T IS THE CLAIM OF THE ASSESSEE THAT THE PAYEE M/S. PARADE HA S OFFERED THE AMOUNT RECEIVED AS INCOME IN THE RELEVANT PREVI OUS YEAR. HENCE, AS PER THE RATIO LAID DOWN BY THE HONBLE SU PREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES LTD., (SUPRA) NO DEMAND UNDER SECTION 201(1) CAN BE RAISE D AGAINST THE ASSESSEE AS HE CANNOT BE TERMED AS ASSESSEE IN DEFAULT. HAVING HEARD THE PARTIES, WE ARE OF THE VIEW THAT T HE LD. CIT(A) WAS CORRECT IN DIRECTING THE A.O. TO DECIDE THE ISS UE AFTER VERIFYING ASSESSEES CLAIM OF OFFERING OF INCOME BY THE PAYEE ON THE AMOUNTS RECEIVED. IF ASSESSEES CLAIM IS FOUND TO BE CORRECT, A.O. CANNOT TREAT THE ASSESSEE AS ASSESSEE IN DEFAULT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES LTD., (SUPRA). ACCORD INGLY, WE DIRECT THE A.O. TO DECIDE THE ISSUE WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF THIS ORDER BY APPLYING THE RATIO LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF HINDUS TAN COCA COLA BEVERAGES (SUPRA). GROUND NO.3 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 25. IN GROUND NO.4 ALONG WITH ITS SUB-GROUNDS ASSESSEE HAS CHALLENGED THE DEMAND RAISED UNDER SEC TION 201(1) AND 201(1A) ON PAYMENTS MADE TOTALING TO 12 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. RS.12,50,000 TO M/S. USHA KIRAN MOVIES TOWARDS LOCA TION RENT. 26. BRIEFLY THE FACTS ARE, THE A.O. IN COURSE OF PROCEEDING NOTICED THAT ASSESSEE HAS PAID AN AMOUNT OF RS.12,50,000 TOWARDS LOCATION RENT TO M/S. USHA KIR AN MOVIES WITHOUT DEDUCTING TAX AT SOURCE. A.O. THEREFORE, TR EATED ASSESSEE AS ASSESSEE IN DEFAULT AND RAISED DEMAND U NDER SECTIONS 201(1) AND 201(1A) OF THE ACT. BEING AGGRI EVED OF THE ORDER PASSED, ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A). LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FACTS AND MATERIALS ON RECORD, DIREC TED THE A.O. TO COMPUTE TDS AS PER SECTION 194I. 27. LEARNED A.R. SUBMITTED BEFORE US THAT THE LOCA TION RENT OF RS.12,50,000 PAID TO M/S. USHA KIRAN MOVIES IS ON THE BASIS OF A COMPOSITE CONTRACT BETWEEN THE PARTIES W HICH INCLUDED SUPPLY OF MAN POWER AND FOOD, LIGHTING, OT HER EQUIPMENTS, GENERATOR DIESEL EXPENSES ETC., ON A RA TE CONTRACT BASIS FOR AN AGREED NUMBER OF DAYS. HENCE, THE PAYM ENTS COME WITHIN THE PURVIEW OF WORKS CONTRACT AS ENVISA GED UNDER SECTION 194C OF THE ACT AND THE ASSESSEE HAS ACCORD INGLY DEDUCTED TAX IN TERMS OF SECTION 194C. LEARNED A.R. SUBMITTED THAT THE PAYMENTS MADE CANNOT COME STRICTLY WITHIN THE PURVIEW OF SECTION 194I AS HELD BY THE LD. CIT(A). 28. LEARNED D.R. ON THE OTHER HAND RELIED UPON THE ORDERS OF THE LD. CIT(A). 29. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIALS ON RECORD. AS CAN BE SEEN LD. CIT(A) HAS DIRECTED THE A.O. TO COMPUTE TDS UNDER SECTION 194I BY 13 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. TREATING THE LOCATION RENT AS INCOME FROM RENT. HOW EVER, IT IS THE CLAIM OF THE ASSESSEE THAT THE LOCATION RENT PA ID TO M/S. USHA KIRAN MOVIES COMPRISE OF VARIOUS OTHER PAYMENT S AND IN THE NATURE OF A COMPOSITE CONTRACT. HENCE, THE PROV ISIONS OF SECTION 194C WOULD APPLY. 30. HAVING HEARD THE PARTIES, WE ARE OF THE VIEW T HAT THE MATTER REQUIRES RE-CONSIDERATION BY THE A.O. AS THE EXACT NATURE OF PAYMENT HAS TO BE VERIFIED BY EXAMINING T HE CONTRACT ENTERED INTO BETWEEN THE PARTIES. IT IS CLAIMED BY ASSESSEE, LOCATION RENT ALSO INCLUDES PAYMENTS TOWARDS MANPOW ER AND FOOD, ELECTRICITY, DIESEL EXPENSES ETC., ATLEAST TH ESE PAYMENTS CANNOT BE SAID TO BE COMING WITHIN THE EXPRESSION RENT AS DEFINED UNDER SECTION 194I. THEREFORE, WITHOUT VERI FYING THE DETAILS OF PAYMENTS AND TERMS OF CONTRACT, IT CANNO T BE CONCLUDED THAT THE LOCATION RENT IS PAYMENT RECEIVE D TOWARDS LEASE, SUB-LEASE, TENANCY ETC., AS PER EXPLANATION (I) OF SECTION 194I. AS THE TERMS OF CONTRACT AND DETAILS OF PAYME NT ARE NOT BEFORE US, WE ARE NOT IN A POSITION TO DECIDE THE I SSUE. ACCORDINGLY, WE REMIT THE MATTER BACK TO THE FILE O F A.O. FOR DECIDING AFRESH AFTER DUE OPPORTUNITY OF BEING HEAR D TO THE ASSESSEE. GROUND NO.4 OF THE ASSESSEE IS ALLOWED FO R STATISTICAL PURPOSES. 31. IN GROUND NO.5 AND 6 ALONG WITH SUB-GROUNDS ASSESSEE HAS CHALLENGED THE DECISION OF THE LD. CIT (A) IN SETTING ASIDE THE ISSUE TO THE FILE OF A.O. WITH RE GARD TO APPLICABILITY OF TDS PROVISIONS ON PAYMENTS MADE BY ASSESSEE TO PRASAD FILM LABORATORIES OF RS.1,00,000 AND RS.8 ,15,000 TO RAMANAIDU COLOUR LABORATORIES RESPECTIVELY TOWARDS PROCESSING CHARGES. 14 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. 32. SIMILAR ISSUE WAS RAISED BY THE ASSESSEE IN GR OUND NO.3 HEREINABOVE. FOLLOWING OUR DECISION, WE DIRECT THE A.O. TO VERIFY THE INCOME TAX PARTICULARS OF THE CONCERNED PAYEES AND DECIDE THE MATTER WITHIN A PERIOD OF SIX MONTHS FRO M THE DATE OF THIS ORDER KEEPING IN VIEW THE RATIO LAID DOWN B Y THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN COCA COLA BE VERAGES LTD., (SUPRA) AND AFTER AFFORDING DUE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. GROUND NOS.5 AND 6 OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 33. GROUND NO.7 IS WITH REGARD TO COMPUTATION OF INTEREST. SIMILAR GROUND WAS RAISED BY THE ASSESSEE IN ITA.NO.143/HYD/2014 FOR THE A.Y. 2008-2009 DECIDED BY US IN THE EARLIER PART OF THE ORDER. ACCORDINGLY, WE DIRE CT THE A.O. TO DECIDE THE ISSUE OF COMPUTATION OF INTEREST UNDER S ECTION 201(1A) FOLLOWING OUR DIRECTION CONTAINED IN PARA 1 3 OF THE ORDER HEREINABOVE, AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 34. IN THE RESULT, ITA.NO.139/HYD/2014 OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 35. TO SUM-UP, BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18.02.2015. SD/- SD/- (SAKTIJIT DEY) (B.RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 18 TH FEBRUARY, 2015 VBP/- 15 ITA.NO.143 & 139/HYD/2014 M/S. SOWBHYAGA MEDIA LTD., HYDERABAD. COPY TO 1. M/. SOWBHAGYA MEDIA LIMITED, PLOT NO.854E, ROAD NO. 44, JUBILEE HILLS, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD 15(2), I.T. TOWERS, A.C. GUARDS, HYDERABAD. 3. CIT(A)-II, HYDERABAD 4. CIT-(TDS), HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD.