ITO (TDS)3(4), MUMBAI V. TAUHA ADVERTISING P.LTD, MUMBAI

ITA 1715/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100894 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 12-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 133A; 194C; 201(1)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI N.K . BILLAIYA, ACCOUNTANT MEMBER AND RAM L AL NEGI, JUDICIAL MEMBER / I .T.A. NO. 1 715 & 1716 /MUM/201 4 ( / ASSESSMENT YEAR : 200 4 - 0 5 & 200 5 - 0 6 THE INCOME TAX OFFICER(TDS) 3(4), SMT. K.G.M. AYURVEDIC HOSPITAL BLDG., CHARNI ROAD, MUMBAI - 400 002 / VS. M/S. TAUHA ADVERTISING PVT. LTD., 102, LOTUS VILLA, PLOT NO. 85, TPS - III, 16 TH ROAD, BANDRA (W), MUMBAI - 400 060 ./ ./ PAN/GIR NO. : AABCT 4588Q ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI NITIN WAGHMODE / RESPONDENT BY: SHRI DEEPAK TRALSHAWALA / DATE OF HEARING : 01 .0 9 .2015 / DATE OF PRONOUNCEMENT : 01 .0 9 .2015 / O R D E R PER N.K. BILLAIYA, AM: TH ESE TWO APPEAL S BY THE REVENUE ARE DIRECTED AGAINST TWO SEPARATE ORDER S OF THE LD. CIT(A) - 13 , MUMBAI DT. 23 .1 2 .201 3 PERTAINING TO ASSESSMENT YEAR S 2004 - 05 & 2005 - 06 . 2. THE COMMON GRIEVANCE IN BOTH THESE YEARS IS THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS BY DELETING THE ADDITIONS MADE U/S. 201(1) AND 201( 1A) OF THE ACT . ITA. NO.1715/M/2014 2 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF OUTDOOR ADVERTISING THROUGH HOARDINGS. A SURVEY ACTION U/S. 133A WAS CONDUCTED ON 15.2.2005. PURSUANT TO THE SURVEY ACTION, THE TDS DEFAU LT WERE DETECTED BY THE ASSESSING OFFICER WHEREIN IT WAS FOUND THAT THE ASSESSEE HAS DEDUCTED TAX A T SOURCE U/S. 194C OF THE ACT ON PAYMENT TOWARDS ADVERTISEMENT DISPLAY CHARGES. THE AO WAS OF THE FIRM BELIEF THAT THE CORRECT SECTION APPLICABLE ON THE FAC T IS SEC. 194 - I AND ACCORDINGLY THE ASSESSEE WAS TREATED AS ASSESSEE IN DEFAULT U/S. 201(1) OF THE ACT. PENALTY AND INTEREST WERE ACCORDINGLY LEVIED. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND FILED THE NECESSARY DETAILS WHICH INCLUDED LETTER OF THE CONTRACTORS CONFIRMING THEREIN THE RECEIPT OF ADVERTISING RECEIPTS AND ALSO STATING THAT THEY HAVE DISCLOSED THESE RECEIPTS IN THEIR PERSONAL INCOME TAX RETURNS AS BUSINESS INCOME. THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE TRIBUNAL, MUMBAI BENCHES IN ITA NOS. 1277 TO 1279/MUM/2001 IN THE CASE OF SISTER CONCERN M/S. ROSHAN PUBLICITY PVT. LTD. 4.1. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE DECISION OF THE TRIBUNAL, THE LD. CIT(A) WAS CONVINCED THAT SEC. 194C IS THE SECT ION APPLICABLE IN THE CASE OF THE ASSESSEE AND DRAWING SUPPORT FROM THE DECISION OF THE TRIBUNAL IN THE CASE OF ROSHAN PUBLICITY (SUPRA), THE LD. CIT(A) DELETED THE LEVY OF INTEREST U/S. 201(1)/201(1A) OF THE ACT. 5. AGGRIEVED BY THIS, THE REVENUE IS BEF ORE US. ITA. NO.1715/M/2014 3 6. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF THE AO. 7. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDER S OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE DECISION OF THE TRIBUNAL IN THE CASE OF ROSHAN PUBLICITY (SUPRA). WE FIND THAT THE FACTS OF THE CASE IN HAND ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL (SUPRA). THE RELEVANT P ART OF THE SAID ORDER OF THE TRIBUNAL READ AS UNDER: SECTION 194 - I PROVIDES THAT A PERSON WHO IS RESPONSIBLE FOR PAYING TO ANY PERSON ANY INCOME BY WAY OF RENT SHALL DEDUCT INCOME TAX THEREON AT THE RATE PRESCRIBED THEREIN. EXPLANATION (I) TO SECTION 194 - I DEFINES RENT TO MEAN ANY PAYMENT BY WHATEVER NAME CALLED, UNDER ANY LEASE, SUB - LEASE, TENANCY OR ANY OTHER AGREEMENT OR ARRANGEMENT FOR THE USE OF ANY LAND OR BUILDING TOGETHER WITH FURNITURE FITTINGS AND LAND APPURTENANT THERETO. IN THE CASE BEFORE US, THE ASSESSEE HAS TAKEN AND ACQUIRED ONLY RIGHT OF DISPLAYING ADVERTISEMENT AT HOARDING SITES BELONGING TO OTHERS. IT IS THEREFORE, CLEAR THAT WHAT IS BEING USED BY THE ASSESSEE IN THE CASE BEFORE US IS ONLY THE RIGHT OF DISPLAYING THE ADVERTISEMENT. IN OTHER WORDS, THE USE OF HOARDING SITE IS TO FACILITATE DISPLAY OF ADVERTISEMENT. THE AMOUNT IS PAID FOR COMMERCIAL EXPLOITATION OF DISPLAY RIGHTS AND NOT FOR USING HOARDING SITES UNDER ANY LEASE, SUB - LEASE, TENANCY ETC. IN OUR VIEW, SECTION 194 - A IS MORE APPROPRIATELY APPLICABLE TO A CASE WHERE RENT IS PAID IN CONSIDERATION FOR THE USE OF ANY LAND OR BUILDING ETC. UNDER ANY LEASE, SUB - LEASE, TENANCY ETC. IN OTHER WORDS, THERE SHOULD BE A LIVE LING BETWEEN PAYMENT OF COMPENSATION KNOWN AS RENT AND T HE USE OF LAND OR BUILDING AND THIS LIVE LINK IS BY THE LEASE, TENANCY ETC. THIS LIVE LINK IS ABSENT IN THE CASE BEFORE US. WE ARE THEREFORE UNABLE TO SAY THAT THE CHARGES, WHICH WERE PAY BY THE ASSESSEE, WERE PAID IN CONSIDERATION OF MERE USE OF ANY LAND OR BUILDING. IT WAS PAID FOR COMMERCIAL EXPLOITATION OF DISPLAY RIGHTS. IN THIS VIEW OF THE MATTER, THE ORDER OF LD. CIT(A) IS CONFIRMED. ITA. NO.1715/M/2014 4 AS NO DISTINGUISHING FACTS/DECISION HAS BEEN BROUGHT BEFORE US, RESPECTFULLY FOLLOWING THE DECISION OF THE CO - ORDINATE BENCH, WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 9. IN T HE RESULT, BOTH THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF HEARING ON 1 ST SEPTE MBER , 2015 . SD/ - SD/ - ( RAM L AL NEGI ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 1 ST SEPTEMBER , 2015 . . ./ RJ , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI