ACIT 11(1), MUMBAI V. HINDUSTAN THOMPSON ASSOCIATES P,LTD, MUMBAI

ITA 6030/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75477 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 29-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Non-deduction of tax

Judgement Text

H IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI .. , . ... BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM ./ I.T.A. NO. 6030/MUM/2012 ( / ASSESSMENT YEAR : 2008-09 ASSTT. COMMISSIONER OF INCOME TAX 11(1), RIIM NO. 439, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. / VS. M/S HINDUSTAN THOMPSON ASSOCIATES PVT. LTD., PENINSULA CHAMBERS, GANPAT RAO KADAM MARG, LOWER PAREL, MUMBAI -400 013. . / PAN : AACH 1463M ( % / APPELLANT ) .. ( &'% / RESPONDENT ) APPELLANT BY SHRI K.C. PATNAIK RESPONDENT B Y : SHRI PANKAJ JAIN * / DATE OF HEARING : 29-1-2014 * / DATE OF PRONOUNCEMENT : 07-02-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A) 3, MUMBAI DATED 10-07-2012 WHEREBY HE DELE TED THE DISALLOWANCE OF RS. 27.22 CRORES MADE BY THE A.O. U/S 40(A)(IA) OF THE INCOME TAX ACT, 1961 HOLDING THAT THE SAID PROVISION IS ATTRACTED ONLY W HEN THERE IS NON-DEDUCTION OF TAX AT SOURCE AND NOT WHERE THERE IS SHORT DEDUC TION OF TAX AT SOURCE. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WH ICH IS ENGAGED IN THE BUSINESS OF ADVERTISING, MARKET RESEARCH AND INFORM ATION, PUBLIC RELATIONS/AFFAIRS ETC. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ITA 6030/M/12 2 WAS FILED BY IT ON 29-9-2008 DECLARING TOTAL INCOME OF RS. 140.25 CRORES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WA S NOTICED BY THE A.O. THAT WHILE MAKING CERTAIN PAYMENTS ON ACCOUNT OF VARIOUS PROFESSIONAL SERVICES SUCH AS FIELD AGENTS FOR CONDUCTING RESEARCH SURVEY S, EVENT MANAGEMENT, DATA COMPILATION AND TRANSLATION ETC., THE ASSESSE E HAS DEDUCTED TAX AS PER THE PROVISIONS OF SECTION 194-C OF THE ACT. ACCORDI NG TO THE A.O., THE SAID SERVICES AVAILED BY THE ASSESSEE WERE IN THE NATURE OF TECHNICAL SERVICES AND TAX AT HIGHER RATE WAS REQUIRED TO BE DEDUCTED BY T HE ASSESSEE FROM THE PAYMENTS THEREOF AS REQUIRED BY THE PROVISIONS OF S ECTION 194-J OF THE ACT. HE, THEREFORE, DISALLOWED THE EXPENSE ON WHICH SHOR T DEDUCTION OF TAX WAS MADE BY THE ASSESSEE AMOUNTING TO RS. 27.20 CRORES BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. FOR TH IS CONCLUSION, HE RELIED ON THE ASSESSMENT COMPLETED IN ASSESSEES OWN CASE FOR A.Y . 2007-08 WHEREIN A SIMILAR DISALLOWANCE U/S 40(A)(IA) OF THE ACT WAS M ADE FOR SHORT DEDUCTION OF TAX AT SOURCE BY THE ASSESSEE. ON APPEAL, THE LD. C IT(A) DELETED THE DISALLOWANCE MADE BY THE A.O. U/S 40(A)(IA) OF THE ACT RELYING, INTER ALIA, ON THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2007-08 RENDERED VIDE ITS ORDER DATED 25-5-2012 PASSED IN ITA NO. 61 85/MUM/2011 WHEREIN IT WAS HELD THAT NO DISALLOWANCE U/S 40(A)(IA) OF THE ACT COULD BE MADE IF THERE IS ONLY SHORT DEDUCTION OF TAX AT SOURCE. AGGRIEVE D BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS PREFERRED THIS APPEAL BEFOR E THE TRIBUNAL. 3. AT THE TIME OF HEARING BEFORE US, THE LD. REPRES ENTATIVES OF BOTH THE SIDES HAVE AGREED THAT THE SOLITARY ISSUE INVOLVED IN THIS APPEAL OF THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESS EE BY THE DECISION OF THE TRIBUNAL RENDERED VIDE ITS COMMON ORDER DATED 25-5- 2012 PASSED IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2005-06, 2 006-07 AND 2007-08 WHEREIN A SIMILAR DISALLOWANCE MADE U/S 40(A)(IA) O F THE ACT FOR SHORT DEDUCTION OF TAX AT SOURCE BY THE ASSESSEE U/S 194- C INSTEAD OF SECTION 194-J OF THE ACT WAS HELD TO BE UNSUSTAINABLE BY THE TRIB UNAL HOLDING THAT THE ITA 6030/M/12 3 PROVISIONS OF SECTION 40(A)(IA) OF THE ACT ARE APPL ICABLE ONLY WHEN THERE IS NO DEDUCTION OF TAX AT SOURCE AND NOT WHERE THERE IS O NLY SHORT OF DEDUCTION OF TAX AT SOURCE. RESPECTFULLY FOLLOWING THE SAID DECI SION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE, WE U PHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) DELETING THE DISALLOWANCE MADE BY THE A.O. U/S 40(A)(IA) OF THE ACT AND DISMISS THIS APPEAL FILED BY THE REVENU E. 4. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH FEBRUARY, 2014. . * 0 1 07-02-2014 * SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 1 DATED 07-02-2014 .../ RK , SR. PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &'% / THE RESPONDENT. 3. 4 () / THE CIT(A)3, MUMBAI. 4. 4 / CIT 11,, MUMBAI 5. 7 &9 , 9 , / DR, ITAT, MUMBAI H BENCH 6. ; / GUARD FILE. / BY ORDER, '7 & //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI