JCIT(OSD)(TDS),Circle, Panchkula V. M/s Liberty Shoes Ltd., Karnal

ITA 268/CHANDI/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3022 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-08-2021
• Assessment Year: 2017-2018
• Appeal Filed On: 11-06-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Period of limitation; Non-deduction of tax; Time period of passing order; Condonation of delay; TDS; Set aside
• Section: 194C; 201(1); 201; 194J; 13; 22; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRI R.L NEGI, JUDICIAL MEMBER ./ ITA NO. 268/CHD/2020 / ASSESSMENT YEARS : 2017-18 JOINT COMMISSIONER OF INCOME TAX (OSD) (TDS) CIRCLE AAYKAR BHAWAN, SECTOR 2 PANCHKULA M/S LIBERTY SHOES LTD., 13 TH MILE STONE, LIBERTY PURAM, G.T. ROAD, KUTAIL, KARNAL TAN NO: RTKL00664G / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING / REVENUE BY : SMT. MEENAKSHI VOHRA, ADDL. CI T /ASSESSEE BY : SH. SATISH KUMAR GOEL, ADVOCATE $ /DATE OF HEARING : 10.08.2021 $ / DATE OF PRONOUNCEMENT : 20.10 .2021 / ORDER PER R.L. NEGI, JUDICIAL MEMBER: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 26.02.2020 PASSED BY COMMISSIONER OF INCOME TAX (AP PEALS), KARNAL [FOR SHORT THE CIT(A)], WHEREBY THE LD. CIT(A) HA S PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASS ED BY THE AO U/S 201(1) (1A) OF THE INCOME TAX ACT, 1961 [FOR SHORT THE ACT] FOR THE ASSESSMENT YEAR 2017-18. 2. BRIEF FACTS OF THE CASE ARE THAT TDS SURVEY U/S 133A(1) OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF THE ASSES SEE COMPANY ON 19.10.2017. PERUSAL OF RELEVANT DOCUMENTS DURING TH E COURSE OF SURVEY ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 2 PROCEEDINGS AND THE POST SURVEY ENQUIRY REVEALED TH AT THE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE ON THE PAYMENT OF INCENT IVE TO VARIOUS DEALERS. ACCORDINGLY, THE JT. COMMISSIONER INCOME T AX (JCIT) (OSD) TDS CIRCLE PANCHKULA ISSUED NOTICE U/S 201(1)/201(A ) OF THE ACT, TO THE ASSESSEE DIRECTING TO EXPLAIN AS TO WHY TDS HAS NOT BEEN DEDUCTED/SHORT DEDUCTED ON VARIOUS PAYMENTS MADE DURING THE PREVIO US YEAR. IN RESPONSE THEREOF, THE ASSESSEE FILED WRITTEN REPLY AND ALSO MADE AN APPLICATION U/S 144A OF THE ACT FOR ISSUING DIRECTI ONS. THE CONTENTION OF THE ASSESSEE COMPANY BEFORE THE LD. JCIT WAS THAT S INCE THE PAYMENTS WERE MADE TOWARDS INCENTIVES TO VARIOUS PARTIES, QU ESTION OF DEDUCTING TAX AT SOURCE U/S 194H OF THE ACT DOES NOT ARISE. S O FAR AS THE DEDUCTION OF TAX U/S 194J OF THE ACT IS CONCERNED, THE CONTEN TION OF THE ASSESSEE WAS THAT SINCE THERE WAS NO PROFESSIONAL/ TECHNICAL SERVICES INVOLVED IN ON LINE ADVERTISEMENT TO PROMOTE COMPANYS SALE, NO TAX WAS REQUIRED TO BE DEDUCTED U/S 194J OF THE ACT. HOWEVER, REJECTING THE CONTENTION OF THE ASSESSEE THE LD. JCIT HELD THE ASSESSEE LIABLE TO PAY INTEREST U/S 201(1A) OF THE ACT FOR NON-DEDUCTION OF TAX AT SOUR CE U/S 194H AND 194J OF THE ACT. IN THE FIRST APPEAL, THE LD. CIT(A) SET ASIDE THE FINDINGS OF THE LD. JCIT AND DELETED THE ADDITION MADE ON ACCOU NT OF NON-DEDUCTION OF TAX AT SOURCE U/S 194H AMOUNTING TO RS 71,09,165 AND U/S 194C AMOUNTING TO RS.7,93,455/-. AGAINST THE SAID FINDIN GS OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 3 3. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PA SSED BY THE LD. CIT(A) ON THE FOLLOWING GROUNDS: - 1. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE LD. CIT(A) IS RIGHT IN ALLOWING THE APPEAL OF THE DEDUCTOR WHEREAS, THE DEDUCTOR WAS LIABLE TO DEDUCT TAX AT SOURCE U/S 194H OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF INCENTIVE PAID. 2. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS RIGHT TO JUSTIFYING THAT THE DEDU CTOR WAS LIABLE TO DEDUCT TAX AT SOURCE U/S 194C OF THE INCOME TAX ACT, 1961 INSTEAD OF 194J. 3. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A] WAS CORRECT IN HOLDING THAT THE JUDGMENT OF HON'BLE ITAT IN CASE OF VODAFONE IDEA LTD. VS ASSISTANT COMMISSIONER OF INCOME TAX (TDS) CHANDIGARH [2019] 109 TAXMANN.COM 466(CHANDIGARH- TRIBE.) AND HINDUSTAN COCA COLA BEVERAGES (P.J LTD. VS COMMISSIONER OF INCOME TAX-ILL, JAIPUR [2017] 87TAXMANN.COM 295(RAJASTHAN) ARE APPLICABLE TO THE FACTS OF THE CASE. 4. WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A] WAS CORRECT IN HOLDING THAT THE JUDGMENT OF HON'BLE HIGH COURT IN CASE OF PR. COMMISSIONER OF INCOME TAX-8 VS RELIANCE COMMUNICATION ON 22 JULY 2019 (BOMBAY HIGH COURT) IS APPLICABLE TO THE FACTS OF THE CASE. 4. SINCE THERE IS A DELAY OF 37 DAYS IN FILING THE PRESENT APPEAL, THE APPELLANT/REVENUE HAD FILED AN APPLICATION FOR COND ONATION OF DELAY STATING THAT DUE TO COUNTRYWIDE LOCKDOWN IN THE WAK E OF COVID-19 PANDEMIC W.E.F. 25.03.2020, THE PROCESS FOR FILING APPEAL COULD NOT BE COMPLETED, THEREFORE, THE PRESENT APPEAL COULD NOT BE FILED WITHIN LIMITATION PERIOD. DURING THE COURSE OF ARGUMENTS, THE LD. DR SUBMITTED ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 4 BEFORE US THAT THE REVENUE COULD NOT FILE THE APPEA L WITHIN THE LIMITATION PERIOD DUE TO THE CIRCUMSTANCES BEYOND ITS CONTROL. THE LD. DR FURTHER INVITED OUR ATTENTION TO THE PROVISIONS OF THE TAXA TION AND OTHER LAWS (RELAXATION OF CERTAIN PROVISIONS) BILL, 2020 AND S UBMITTED THAT VIDE THE SAID BILL THE GOVERNMENT OF INDIA EXTENDED THE DUE DATES FOR FILING APPEALS, REPLY OR ANY REPORT ETC. FALLING DURING TH E PERIOD 20.03.2020 TO 31.12.2020 TO 31.03.2021. IN VIEW OF THE AFORESAID AVERMENTS, THE LD. DR SUBMITTED THAT THE APPLICATION FILED BY THE REVE NUE FOR CONDONATION OF DELAY MAY BE ALLOWED AND THE DELAY OF 37 DAYS IN FILING THE PRESENT APPEAL MAY BE CONDONED AND THE REVENUE MAY BE ALLOW ED TO ARGUE ITS APPEAL ON MERITS. 5. THE LD. COUNSEL FOR THE ASSESSEE DID NOT OPPOSE THE APPLICATION FILED BY THE REVENUE. SINCE THE REVENUE HAS EXPLAIN ED THE DELAY WHICH PREVENTED IT FROM FILING THE PRESENT APPEAL WITHIN LIMITATION PERIOD, WE ALLOWED THE APPLICATION AND CONDONED THE DELAY AND PERMITTED THE LD. DR TO ARGUE THE APPEAL ON MERITS. 6. ACCORDINGLY, THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE ASSESS EE WAS NOT REQUIRED TO DEDUCT TAX AT SOURCE IN RESPECT OF INCENTIVE PAID T O VARIOUS DEALERS AS INCENTIVES. THE LD. DR FURTHER SUBMITTED THAT THE A SSESSEE DURING THE PREVIOUS YEAR PAID AN AMOUNT OF RS. 12,18,71,396/- ON ACCOUNT OF INCENTIVE TO ITS DEALERS. THE PAYMENT WAS MADE FOR SERVICES RENDERED FOR SELLING GOODS. THE LD. DR FURTHER CONTENDED THAT TH E DISTRIBUTORS WERE ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 5 APPOINTED BY THE ASSESSEE ON FULFILLING CERTAIN CON DITIONS, THEREFORE THE RELATIONSHIP BETWEEN THE ASSESSEE AND THE DISTRIBUT ORS WAS NOT BASED ON THE PRINCIPLE OF EQUITY BUT OF PRINCIPAL AND THE AG ENT. THE LD. DR PLACING RELIANCE ON THE JUDGMENT OF THE HONBLE CAL CUTTA HIGH COURT IN THE CASE OF HUTCHISON TELECOM EAST LTD. VS. CIT 59 TAXMANN.COM 176 (CALCUTTA) SUBMITTED THAT SINCE THE FINDINGS OF THE LD. CIT(A ) ARE CONTRARY TO THE RATIO LAID DOWN BY THE HON'BLE CALC UTTA HIGH COURT, THE SAME IS LIABLE TO BE SET ASIDE. 7. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE SUPPORTING THE ORDER PASSED BY THE LD. CIT(A) SUBMITTED THAT SINCE THE ASSESSEE COMPANY DEALS WITH ITS DISTRIBUTORS/DEALERS/FRANCHI SE SHOWROOMS ON PRINCIPAL-TO-PRINCIPAL BASIS AND DOES NOT RESERVE R IGHT OVER THE STOCKS OF GOODS SOLD TO THEM, THE SAME CANNOT BE TERMED AS AG ENCY ARRANGEMENTS WHICH IS THE PREREQUISITE FOR APPLICABILITY OF THE PROVISIONS OF SECTION 194H OF THE ACT. EXPLANATION (I) TO SECTION 194H CL ARIFIES THAT THE COMMISSION OR BROKERAGE INCLUDES ANY PAYMENT RECEIV ED OR RECEIVABLE, DIRECTLY OR INDIRECTLY BY A PERSON ACTING ON BEHALF OF ANOTHER PERSON FOR SERVICES RENDERED NOT BEING PROFESSIONAL SERVICES O R OF ANY SERVICES IN THE COURSE OF BUYING AND SELLING OF GOODS OR IN REL ATION TO ANY TRANSACTIONS RELATING TO ANY ASSET, VALUABLE ARTICL E OR THINGS, NOT BEING SECURITIES. THE LD. COUNSEL PLACING RELIANCE ON THE JUDGMENT OF THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF HINDUSTAN COCA COLA BEVERAGES (P.) LTD. VS. COMMISSIONER OF INCOME-TAX- ILL, JAIPUR ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 6 [2017] 87 TAXMANN.COM 295 , JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX-8 VS RELIANCE COMMUNICATIONS IN ITA NO 603 OF 2017 ORDER OF THE CHANDIGARH BENCH OF THE ITAT IN THE CASE OF VODAFONE IDEA LTD. VS. ASSISTANT COMMISSIONER OF INCOME-TAX(TDS), CHANDIGARH [2019] 109 TAXMANN.COM 466 (CHANDIGARH - TRIB.) AND THE DECISION OF THE JAIPUR BENCH OF THE ITAT IN THE CASE OF BHARTI HEXACOM LTD. VS. INCOME TAX OFFICER (TDS)-II, JAIPUR [2016] 68 TAXMANN.COM. 388 (JAIPUR TRIB., SUBMITTED THAT SINCE THE FINDINGS OF THE LD. CIT(A) ARE IN ACCORDANCE WITH THE JUDGMENTS OF THE HON'BLE HIGH C OURTS AND THE DECISIONS OF THE VARIOUS BENCHES OF THE TRIBUNAL, T HERE IS NO INFIRMITY IN THE SAID ORDER TO INTERFERE WITH. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE MATERIAL ON RECORD INCLUDING THE CASES RELIED UPON BY THE PARTIES. THE LD. CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER: I HAVE EXAMINED THE ISSUE AND FIND THAT IN RESPECT OF NON-DEDUCTION OF TDS AND APPLICATION OF SECT ON 194H, THE ASSESSING OFFICER (A.O.) TREATED THE BENEFITS ALLOWED TO FRANCHISE SHOWROOMS AND FRANCHISE DISTRIBUTORS AS PER RELATIONSHIP OF ONE PERSON ACTING ON BEHALF OF OTHER FOR BUYING AND SELLING OF GOODS. THE CONCEPT AND PERCEPTION OF COMMISSION AND BROKERAGE WAS THUS ENVISAGED BY JCIT WHILE IMPARTING DIRECTIONS UNDER SECTION 144A TO A.O. THE COUNSEL FOR THE APPELLANT, VEHEMENTLY, ARGUED THAT PROVISIONS OF SECTION 194H ARE SPECIFIC AND BE READ BETWEEN THE LINES AND ALSO ALONGSIDE TO BE LOOKED INTO THE DEFINITION AND JUDGMENTS PRONOUNCED ON THE PRINCIPAL AND AGENT RELATIONSHIP ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 7 ETC. THE A.O. WHILE APPLYING SECTION 194H IN THE APPELLANT'S CASE EXCEPT FOR HIS OWN OBSERVATIONS, H AS NEITHER REFERRED NOR RELIED ON ANY CASE LAW AT ALL ITAT, HIGH COURT OR HON'BLE APEX COURT, AS STATED BY THE COUNSEL IN THE COURSE OF APPELLATE PROCEEDINGS BEFORE ME. I FIND THIS TO BE A FACT AS PER THE TEXT OF A.OS ORDER. THE COUNSEL FOR THE APPELLANT STATED THAT THE A.O., WHILE PASSING THE ORDER UNDER SECTION 201 (1)(LA), SIMPLY PROCEEDED ON THE TDS SURVEY PARTY'S OBSERVATIONS AS ALSO POST SURVEY DETAILS AND THE REPLIES MADE BY APPELLANT. HE ALSO FRAMED HIS ORDER WHILE COMPLYING WITH THE DIRECTIONS OF JC1T UNDER SECTION 144A BEING MANDATORY TO FOLLOW AND ACT UPON. THE COUNSEL FOR THE APPELLANT, IN HIS WRITTEN SUBMISSIONS, PRODUCED A SYNOPSIS CHART OF A.O.'S REPORTING TO JCIT IN PROCEEDINGS UNDER SECTION 144A AND LATER THE PARA WISE DIRECTIONS OF JCIT, WHILE CONTENDING THAT NONE OF THE ADVERSE OBSERVATIONS AR E APPLICABLE IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE. I HAVE VERY CAREFULLY LOOKED INTO THE PAPER BOOK FILED AS WELL THE WRITTEN SUBMISSIONS ALONG WITH COPIES OF FEW JUDGMENTS IN SUPPORT OF TH E APPELLANT'S CASE THAT THE POLICY OF SALES FOR THE FRANCHISE SHOWROOMS AND DISTRIBUTORS HAD SPECIFICALLY PROVIDED THE SCHEME FOR INCENTIVES AND NOT A PENNY WAS PAID OR WAS PAYABLE AS COMMISSION OR BROKERAGE OR ANY PAYMENT IN THE CASE OF THE APPELLANT. IT WAS STRONGLY ARGUED THAT AT NO STAGE ANY RELATIONSHIP LIKE PRINCIPAL AND AGENT EXISTED BETWEEN THE APPELLANT COMPANY AND ITS SHOWROOM FRANCHISEES OR DISTRIBUTORS, FURTHER, AS PER EXPLANATION 1 TO SECTION 194H NEVER WERE ANY SERVICES RENDERED IN BUYING AND SELLING. ACCORDING TO THE PAST HISTORY IN APPELLANT'S CASE, SUCH A PROPOSITION WAS NEVER RAISED AND AS PER THE ASSESSEE, RIGHTLY SO AS THE PROVISIONS OF SECTION 194H WERE APPLICABLE ON THE RIGHTFUL INCENTIVES OF THE BUYERS AS PER THE SALE POLICY. IN VIEW OF THE F ACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE, NO RELEVANCE EXISTED IN THE CITATIONS OF INDIAN CONTRA CT ACT WHEN READ WITH SECTION 194H READ WITH EXPLANATION 1. THE RELIANCE ON JUDGMENTS INCLUDING THAT OF THE DELHI HIGH COURT SQUARELY APPLIES IN FAVOUR OF APPELLANT WHEREIN IT WAS HELD THAT: - 'THE QUANTUM OF INCENTIVES EARNED BY A DEALER MAY BE DEPENDENT ON THE QUANTUM OF ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 8 CERTAIN SALES, BUT THE NORMAL BUYING AND SELLING GOES ON IRRESPECTIVE OF THE SCHEMES AND, HENCE, THESE INCENTIVES CANNOT BE TERMED AS COMMISSION IN THE NORMAL COURSE OF BUYING AND SELLING THE GOODS AS ENVISAGED IN SECTION 194H OF THE ACT ' THE APPELLANT ALSO RELIED UPON THE FOLLOWING JUDGMENTS OF ITAT CHANDIGARH BENCH AND HIGH COURTS: I) VODAFONE IDEA LTD. VS. ASSISTANT COMMISSIONER OF INCOME-TAX (TDS), CHANDIGARH [2019] 109 TAXMANN.COM 466 (CHANDIGARH - TRIB.) II) HINDUSTAN COCA COLA BEVERAGES (P.) LTD. VS. COMMISSIONER OF INCOME-TAX-ILL, JAIPUR [2017] 87 TAXMANN.COM 295 (RAJASTHAN) III)BHARTI HEXACOM LTD. VS. INCOME TAX OFFICER (TDS)-II, JAIPUR [2016] 68 TAXMANN.COM .388 (JAIPUR TRIB.) IV) PR. COMMISSIONER OF INCOME TAX-8 VS RELIANCE COMMUNICATIONS ... ON 22 JULY, 2.019 (BOMBAY HIGH COURT). THESE CITATIONS HAVE ALSO BEEN PERUSED AND CONSIDERED AND ARE IN FAVOUR OF THE APPELLANT. THE A.O. OR JCIT DIDN'T REFER TO ANY JUDGMENT IN SUPPOR T OF THEIR OBSERVATIONS THAT PROVISIONS OF SECTION 19 4H READ WITH EXPLANATION 1 BRING THE CASE AS ONE OF SERVICES RENDERED IN BUYING AND SELLING. I DON'T FI ND ANY MERIT: IN THE FINDINGS OF A.O. READ WITH THE DIRECTIONS OF JCIT AND HOLD THAT NO TDS DEDUCTION WAS REQUIRED, KEEPING IN MIND THE FACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE IN RESPECT, O F INCENTIVES PAID/PAYABLE TO THEIR FRANCHISE SHOWROOMS AND DISTRIBUTORS. THIS GROUND OF APPEAL IS DECIDED IN THE APPELLANT'S FAVOUR AND THE ADDITI ON OF NON-DEDUCTION OF TDS UNDER SECTION 194H AMOUNTING TO RS.71,09,165/- ON AMOUNT PAID/CREDITED RS. 12,18,71,196/ IS DELETED. 9. AS POINTED OUT BY THE LD. COUNSEL, THE LD. CIT( A) HAS ALLOWED THIS ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 9 GROUND OF APPEAL OF THE ASSESSEE BY FOLLOWING THE R ATIO LAID DOWN IN THE CASES REFERRED ABOVE. SINCE THE LD. CIT(A) HAS DECI DED THE ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE JUDGMENTS O F THE HON'BLE HIGH COURTS AND THE DECISIONS OF THE TRIBUNAL, DISCUSSED ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF T HE LD. CIT(A). SO FAR AS THE JUDGMENT RELIED UPON BY THE LD. DR IS CONCER NED, IN OUR CONSIDERED OPINION THE FACTS OF THE SAID CASE ARE D IFFERENT FROM THE FACTS OF THE PRESENT CASE, HENCE THE RATIO LAID DOWN IS N OT APPLICABLE TO THE PRESENT CASE. ACCORDINGLY, WE UPHOLD THE FINDINGS O F THE LD. CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 10. VIDE GROUND NO 2 THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN HOLDING THAT THE ASSESSEE WAS NOT REQ UIRED TO DEDUCT TAX U/S 194J. THE LD. DR SUPPORTING THE ORDER PASSED BY THE JCIT (TDS) SUBMITTED THAT THE LD. JCIT (TDS) PANCHKULA HAS RIG HTLY OBSERVED THAT SINCE THE ASSESSEE HAD MADE PAYMENTS TO VARIOUS ADV ERTISING AGENCIES PROVIDING/MANAGING THE SERVICES OF THE COMPANY THRO UGH ONLINE PORTAL AND SINCE THE ASSESSEE COMPANY HIRED THE SKILL EMPL OYEES WITH TECHNICAL AND PROFESSIONAL QUALIFICATIONS FOR THE AFORESAID P URPOSES, THE PROVISIONS OF SECTION 149J OF THE ACT ARE APPLICABLE IN THE AS SESSEES CASE. ACCORDINGLY, THE LD. DR SUBMITTED THAT THE FINDINGS OF THE LD. CIT(A) MAY BE SET ASIDE. 11. ON THE OTHER HAND, THE LD. COUNSEL SUPPORTING T HE ORDER PASSED BY ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 10 THE LD. CIT(A) SUBMITTED THAT SINCE THE FINDINGS OF THE LD. CIT(A) ARE IN ACCORDANCE WITH THE PROVISIONS OF LAW THEREFORE, TH ERE IS NO MERIT IN THIS GROUND OF APPEAL OF THE REVENUE. THE LD. COUNSEL FU RTHER POINTED OUT THAT AS PER THE CLARIFICATORY QUESTION/ANSWER IN CI RCULAR NO. 715 DATED 08/08/1995, THE ADVERTISING CONTRACT SHALL FALL U/S 194C AND ADVERTISING AGENCIES SHALL HAVE TO DEDUCT TAX AT SOURCE U/S 194 J OF THE ACT, WHILE MAKING PAYMENTS TO THEIR ARTISTS, MODELS ETC. 12. WE HAVE GONE THROUGH THE AVAILABLE MATERIAL ON THE RECORD IN THE LIGHT OF THE RIVAL SUBMISSIONS OF THE PARTIES. DURI NG THE PREVIOUS YEAR THE ASSESSEE PAID RS.99,18,191/- TO THREE PARTIES O N WHICH THE ASSESSEE DEDUCTED TAX @ 2% UNDER SECTION 194C OF THE ACT. TH E LD. COUNSEL PLACING RELIANCE ON THE JUDGMENT OF THE HON'BLE SUP REME COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGE (P) LTD. VS. CIT 163 T AXMAN 355(SC) SUBMITTED THAT AS PER THE RATIO LAID DOWN IN THE S AID CASE, WHERE THE RECIPIENT OF INCOME HAS ALREADY PAID TAXES ON A MOUNT RECEIVED FROM DEDUCTOR, THE DEPARTMENT CANNOT RECOVER TAX FROM DE DUCTOR ON THE SAME INCOME BY TREATING DEDUCTOR TO BE ASSESSEE-IN-DEFAU LT FOR SHORTFALL IN ITS AMOUNT OF TAX DEDUCTED AT SOURCE. THE LD. CIT(A) HA S DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE HOLDING AS UNDER: - THE GROUNDS OF APPEAL PERTAIN TO THE APPLICATION O F PROVISIONS OF SECTION 194J INSTEAD OF 194C, IN RESP ECT OF ONLINE MANAGERIAL SERVICES AND HOLDING THE APPELLANT IN DEFAULT FOR LESSER DEDUCTION OF 2% RAT E UNDER SECTION 194C. THE A.O. PROCEEDED TO CALCULATE AT 10% RATE WHILE WORKING OUT THE SHORT DEDUCTION A T ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 11 RS. 7,93,455/- ON AMOUNT PAID/CREDITED OF RS. 99,18,191/-, THE PAYMENTS PERTAINED TO THREE PARTIE S AND THE COUNSEL FOR THE APPELLANT, VEHEMENTLY, ARGU ED AND STATED IN WRITTEN SUBMISSIONS, AS WELL, THAT IN THE FACTS OF HIS CASE, HE HAD RIGHTLY AND LEGALLY DEDUC TED TDS AT 2% RATE. IN ADDITION TO THAT HE PLEADED THAT THE STATUS BETWEEN HIM AND THE PAYEE WAS SUCH IN WHICH PROVISIONS OF SECTION 194J ARE NOT APPLICABLE . THE APPELLANT STATED THAT THE AMENDMENTS BROUGHT IN BY THE LEGISLATURE IN VIEW OF UNCALLED FOR LITIGATI ONS, ARE CONTINUING, I HAVE PERUSED THE SAME AND FIND TH AT SUCH AMENDED PROVISION CAN BE CONSIDERED AS OF CLARIFICATORY NATURE ALTHOUGH NOT RETROSPECTIVE, I AM INCLINED TO AGREE IN FAVOUR OF THE APPELLANT AND HO LD THAT NO SHORT IDS DEDUCTION WAS THERE IN HIS CASE A ND, HENCE, DELETE THE AMOUNT CALCULATED AT RS. 7,93,455 /- ON AMOUNT, PAID/CREDITED OF RS, 99,18,191/-. 13. IN OUR CONSIDERED VIEW, THE FINDINGS OF THE LD. CIT(A) ARE IN ACCORDANCE WITH THE PROVISIONS OF LAW AND IN CONSON ANCE WITH THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN COCO COLA BEVERAGE (P) LTD. VS. CIT (SUPRA). HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT( A) TO INTERFERE WITH THE SAME. ACCORDINGLY, UPHOLD THE FINDINGS OF THE L D. CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON 20 TH OCT. 2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 20.10.2021 .. ,-.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT ITA NO.268-CHD-2020- L IBERTY SHOES LIMITED, KARNAL 12 3. / / CIT 4. / ( )/ THE CIT(A) 5. - 2 , $2 , 4 / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR