ACIT 11(1), MUMBAI V. ANUSSHKA IMAGES P. LTD, MUMBAI

ITA 4645/MUM/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7953 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 09-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: N R AGARWAL
• Keywords: Difference of opinion
• Section: 194C

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI , ! ! ! ! , ' ' ' ' BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : . : . : . : 4645 4645 4645 4645/ // / / // / 2011, ) ! *! 2007-08 ITA NO. : 4645/MUM/2011 , AY 2007-08 ACIT -11(1), ROOM NO. 439, AAYAKAR BHAVAN, M K MARG, MUMBAI -400 020 VS M/S ANUSHKA IMAGES PVT. LTD., F6/102, SHANKAR DHAM, SUNDERVAN COMPLEX, LOKHANDWALA ROAD, SHASTRI NAGAR, ANDHERI(W), MUMBAI -400 053 0 .: PAN: AAECA 3302 J 01 (APPELLANT) 2301 (RESPONDENT) APPELLANT BY : SHRI M RAJAN RESPONDENT BY : SHRI N R AGARWAL )456 /DATE OF HEARING : 11-08-2014 78* 456/ DATE OF PRONOUNCEMENT : 13-08-2014 9 9 9 9 O R D E R ! ! ! ! , . . . . . .. . PER VIVEK VARMA, J.M. : THE INSTANT APPEAL IS FILED BY THE DEPARTMENT AGAIN ST THE ORDER OF CIT(A) 3, MUMBAI, DATED 28.03.2011. 2. THE ASSESSEE IS IN THE BUSINESS OF FILM AND EVEN T MANAGEMENT AND SERIAL PRODUCTIONS. IN THE YEAR UNDER CONSIDERA TION, THE AO NOTICED THAT THE ASSESSEE HAD BOOKED EXPENSES OF ST UDIO AND LOCATION HIRE AND EQUIPMENT HIRE, WHEREIN ON DISBURSEMENT OF PAYMENT TO THEM, DEDUCTED TAX AT SOURCE U/S 194C. ACCORDING TO THE AO, SINCE THE EXPENSE WAS FOR HIRING, IT FELL WITHIN THE PROVISIO NS OF SECTION 194I AND THEREFORE, THE ASSESSEE HAD ERRED IN DEDUCTION OF T AX UNDER THE WRONG PROVISION AND AS A CONSEQUENCE, THE TDS WAS DEDUCTE D AT A LESSER AMOUNT. HE, THEREFORE, DISALLOWED THE EXPENSES U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961. M/S ANUSHKA IMAGES PVT. LTD. ITA NO. 4645/MUM/2011 2 3. THE ASSESSEE APPROACHED THE CIT(A), WHO NOT ONLY ACCEPTED THE FACT THAT TAS WAS DEDUCTED, BUT DELETED THE QUANTUM OF ADDITION ALSO. 4. AGAINST THE ORDER OF THE CIT(A) ON THE ISSUE, TH E DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) MUMBAI HAS ERRED IN DELETING THE ADDITION OF RS. 24,60,921/- MADE UNDER SECTION 40(A)(IA) OF THE INCOME-TAX ACT O N ACCOUNT OF SHORT DEDUCTION OF TDS BY HOLDING THAT THE SAID PAYMENTS ARE IN THE NATURE OF A CONTRACT COVERED UNDER SECTION 194C AND NOT UNDER 194J AS CONTENDED BY THE ASSESSING OFFICER. 2 THE APPELLANT PRAYS THAT THE ORDER OF CIT(APPEALS ) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFIC ER RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 5. THE DR SUPPORTED THE ORDER OF THE AO AND THE AR SUPPORTED THE ORDER OF THE CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PER USED THE ORDERS. AT THE OUTSET, THE UNCONTESTED FACT IS THAT THE ASSESSEE DEDUCTED TAS ON THE PAYMENTS IT MADE TO THE LESSOR. THE ONLY ISSUE BEFORE US IS, WHETHER THERE COULD BE A DISALLOWANCE U/S 40(A)(IA) FOR SHORT-DEDUCTION OF TDS. THIS ISSUE IS SQUARELY COVE RED BY THE VARIOUS DECISIONS OF THE COORDINATE BENCHES OF THE ITAT. SR. NO. DECISION IN DETAIL PAGE NOS. 1 CHANDABHOY & JASSOBHOY C BENCH ITA NO. 20/MUM/2010 PAGE NO. 3 TO 5 2 EGS SURVEY P LTD. ITA NO. 6281/MUM/2011 DATED 10/8/2012 PAGE NO.6 TO 9 3 CINETEK TELEFILMS PVT. LTD. VS ACIT ITA NO. 7834 & 7645/MUM/2010 PAGE NO. 10 TO 15 4 HIGHLIGHT PICTURE S (INDIA) VS ACIT ITA NO. 5826/MUM/2011 PAGE NO. 16 TO 22 5 APOLLO TYRES LTD. VS DCIT 155 TTJ 470 (C OCHIN) PAGE NO. 23 TO 24 AND BY THE ORDER OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF DCIT VS SK TEKRIWAL, REPORTED IN 361 ITR 432 (CAL), WHEREIN IT HAS BEEN HELD, M/S ANUSHKA IMAGES PVT. LTD. ITA NO. 4645/MUM/2011 3 THE ASSESSEE DEDUCTED TAX UNDER SECTION 194C(2) OF THE INCOME-TAX ACT, 1961, FROM PAYMENTS MADE TO SUB-CONT RACTORS. ACCORDING TO THE REVENUE, THE PAYMENTS WERE IN THE NA TURE OF MACHINERY HIRE CHARGES FALLING UNDER THE HEAD RENT AND THE PROVISIONS OF SECTION 194-I WERE APPLICABLE. ON THE GROUND THAT THE ASSESSEE HAD DEDUCTED TAX AT 1 PER CENT. UNDER SECTION 194C(2) AS AGAINST THE ACTUAL DEDUCTION TO BE MADE AT 10 PER CENT UNDER SECTION 194-I THE PAYMENTS WERE DISALLOW ED PROPORTIONATELY INVOKING THE PROVISIONS OF SECTION 40(A)(IA). THE TRIBUNAL HELD THAT WHERE TAX WAS DEDUCTED BY THE AS SESSEE, THOUGH UNDER A BONA FIDE WRONG IMPRESSION UNDER WRO NG PROVISIONS, THE PROVISIONS OF SECTION 40(A)(IA) COU LD NOT BE INVOKED AND THAT IF THERE WAS ANY SHORTFALL DUE TO ANY DIFFERENCE OF OPINION AS TO THE TAXABILITY OF ANY I TEM OR THE NATURE OF PAYMENTS FALLING UNDER VARIOUS TAX DEDUCT ION AT SOURCE PROVISIONS, THE ASSESSEE COULD BE DECLARED T O BE AN ASSESSEE IN DEFAULT UNDER SECTION 201 BUT NO DISALL OWANCE COULD BE MADE INVOKING THE PROVISIONS OF SECTION 40 (A)(IA). ON APPEAL: HELD, DISMISSING THE APPEAL, THAT NO SUBSTANTIAL QU ESTION OF LAW AROSE FROM THE ORDER OF THE TRIBUNAL. 7. WE FIND THAT THE ABOVE CASE IS EXACTLY ON THE IS SUE RAISED BEFORE US IN THE IMPUGNED APPEAL, AND SQUARELY COVERS THE APPEAL IN HAND. BESIDES THE IMPUGNED ISSUE BEING SQUARELY COVERED B Y THE VARIOUS DECISIONS, THE CIT(A) HAS IN FACT, DELETED EVEN THE QUANTUM ADDITIONS. IN SUCH A CIRCUMSTANCE DISALLOWANCE DOES NOT HAVE A NY LEGS AT ALL. 8. WE, THEREFORE, SUSTAIN THE ORDER OF THE CIT(A) A ND CONSEQUENTIALLY REJECT THE GROUNDS AS RAISED. 9. IN THE RESULT, THE APPEAL AS FILED BY THE DEPART MENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH AUGUST, 2014. SD/- SD/- ( ) ( ! ! ! !) (B R BASKARAN) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 13 TH AUGUST, 2014 M/S ANUSHKA IMAGES PVT. LTD. ITA NO. 4645/MUM/2011 4 25/ COPY TO:- 1) 01/ THE APPELLANT. 2) 2301/ THE RESPONDENT. 3) THE CIT (A)-3, MUMBAI. 4) < 11 , MUMBAI / THE CIT-11, MUMBAI. 5) =>25) , , THE D.R. A BENCH, MUMBAI. 6) >?!@ COPY TO GUARD FILE. 9) / BY ORDER / / TRUE COPY / / [ A/BC , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *EFB) .). * CHAVAN, SR. PS