ITO (TDS) RG 2(3), MUMBAI V. OGLIVI & MATHER P.LTD, MUMBAI

ITA 7380/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100745 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 23-03-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 13-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV
• Assessee Lawyers: AASTHA SHAH
• Section: 194C; 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 6800/MUM/2012(A.Y 2010-11) ITA NO.6801/MUM/2012(A.Y.2011-12) OGILVY & MATHER PVT. LTD. 14 TH FLOOR, COMMERTZ, INTERNATIONAL BUSINESS PARK, OBEROI GARDEN CITY, OFF WESTERN EXPRESS HIGHWAY, GOREGAON (E), MUMBAI 400 063. PAN: AAACO0427A ... APPELLANT VS. THE INCOME TAX OFFICER (TDS)-2(3), 708, 7 TH FLOOR, K.G.MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI 400002. .... RESPONDENT ITA NO.7380/MUM/2012(A. Y. 2010-11) ITA NO.7381/MUM/2012(A.Y.2011-12) THE INCOME TAX OFFICER (TDS)-2(3), 708, 7 TH FLOOR, K.G.MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI 400002. ...APPELLANT VS. OGILVY & MATHER PVT. LTD. 14 TH FLOOR, COMMERTZ, INTERNATIONAL BUSINESS PARK, OBEROI GARDEN CITY, OFF WESTERN EXPRESS HIGHWAY, GOREGAON (E), MUMBAI 400 063. PAN: AAACO0427A .... RESPONDENT 2 OGILVY & MATHER P. LTD. C.O.NO.28/MUM/2014 (ARISING OUT OF ITA NO.7380/MUM/2012) C.O.NO.29/MUM/2014 (ARISING OUT OF ITA NO.7381/MUM/2012) OGILVY & MATHER PVT. LTD. 14 TH FLOOR, COMMERTZ, INTERNATIONAL BUSINESS PARK, OBEROI GARDEN CITY, OFF WESTERN EXPRESS HIGHWAY, GOREGAON (E), MUMBAI 400 063. PAN: AAACO0427A .... CROSS OBJECTOR VS. THE INCOME TAX OFFICER (TDS)-2(3), 708, 7 TH FLOOR, K.G.MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD, MUMBAI 400002 .......APPELLANT IN APPEAL REVENUE BY : SHRI AKHILENDRA YADAV ASSESSEE BY : MS. ARATI VISSANJI & MS.AASTHA SHAH DATE OF HEARING : 01/07/2015 DATE OF PRONOUNCEMENT : ......../08/2015 ORDER PER G.S. PANNU,AM: THE CAPTIONED SETS OF THREE APPEALS, PERTAIN TO ASSESSMENT YEARS 2010-11 AND 2011-12 AND INVOLVE COMMONS ISS UES. SINCE THE APPEALS RELATE TO THE SAME ASSESSEE AND INVOLVE COM MON ISSUES, THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSO LIDATED ORDER IS BEING PASSED FOR THE SAKE OF BREVITY AND CONVENIEN CE. 3 OGILVY & MATHER P. LTD. 2. FIRST, WE MAY TAKE UP THE APPEAL OF THE ASSESSEE IN ITA NO.6800/MUM/2012 WHICH IS DIRECTED AGAINST THE ORDE R OF CIT(A)-14 MUMBAI DATED 18.09.2012 PERTAINING TO THE ASSESSMEN T YEAR2010-11, WHICH IN-TURN HAS ARISEN FROM THE ORDER OF THE ASS ESSING OFFICER DATED 14.02.2012 PASSED UNDER SECTION 201(1)/201(1A) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 3. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESS EE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT ,1956 AND IS, INTER- ALIA, ENGAGED IN THE BUSINESS OF ADVERTISING AND MA RKETING COMMUNICATION SERVICES. IN THE IMPUGNED PROCEEDING S, THE ASSESSING OFFICER EXAMINED THE TAX DEDUCTED AT SOURCE BY THE ASSESSEE IN RESPECT OF PAYMENT MADE TO CREATIVE CONSULTANTS. THE ASS ESSEE HAD DEDUCTED TAX AT SOURCE IN TERMS OF THE PROVISIONS OF SECTIO N 194J OF THE ACT CONSIDERING THAT THE PAYMENT MADE TO THE CREATIVE C ONSULTANTS WAS IN THE NATURE OF PROFESSIONAL FEE PAID. AS PER THE AS SESSING OFFICER THE TERMS OF THE EMPLOYMENT OF THE CONSULTANT SHOWED T HAT IT WAS A CASE OF EMPLOYER-EMPLOYEE RELATIONSHIP AND, THEREFORE, T HE PAYMENTS MADE BY THE ASSESSEE WERE LIABLE TO BE SUBJECTED TO TAX DEDUCTION AT SOURCE IN TERMS OF SECTION 192 OF THE ACT. FOR THIS REASO N, THE ASSESSING OFFICER HELD THAT ASSESSEE WAS IN DEFAULT WITHIN THE MEANIN G OF SECTION 201(1) OF THE ACT FOR HAVING SHORT DEDUCTED THE TAX AT SOU RCE AND ACCORDINGLY A DEMAND OF RS.28,00,792/- WAS RAISED IN TERMS OF S ECTION 201(1) OF THE ACT AND INTEREST UNDER SECTION 201(1A) OF THE AC T OF RS. 37,81,069/- WAS ALSO IMPOSED. THE AFORESAID STAND OF THE ASSES SING OFFICER HAS ALSO BEEN AFFIRMED BY CIT(A) AND ACCORDINGLY, ASSESSEE I S IN APPEAL BEFORE US. 4 OGILVY & MATHER P. LTD. 4. BEFORE US, THE LD. REPRESENTATIVE FOR THE ASSESS EE HAS POINTED OUT THAT THE ASSESSEE HAD AVAILED THE SERVICES OF PROFESSIONALS AS RETAINERS/CONSULTANTS AND THE PAYMENTS MADE HAVE BE EN RIGHTLY SUBJECTED TO DEDUCTION OF TAX AT SOURCE UNDER SECTI ON 194J OF THE ACT. CONTENDING THAT THERE WAS NO EMPLOYER- EMPLOYEE REL ATIONSHIP, IT WAS POINTED OUT THAT SO FAR AS THE PAYMENTS MADE TO RET AINERS/CONSULTANTS ARE CONCERNED, THEY DO NOT ENTAIL NORMAL BENEFITS A ND PERQUISITES WHICH ARE PROVIDED TO THE EMPLOYEES, SUCH AS PROVIDENT FU ND, LEAVE ENCASHMENT, GRATUITY, ETC. A REFERENCE HAS ALSO BEE N MADE TO THE SAMPLE COPIES OF INVOICES RAISED BY THE CONSULTANTS , WHICH ARE PLACED IN THE PAPER BOOK, TO POINT OUT THAT SERVICE TAX WAS C HARGED BY THE CONSULTANTS, WHICH CLEARLY ESTABLISHED THAT IT IS A CASE WHERE SERVICES HAVE BEEN PROVIDED TO THE ASSESSSEE AND IT IS NOT A CASE OF AN EMPLOYER-EMPLOYEE RELATIONSHIP. IN THE COURSE OF H EARING, THE LD. REPRESENTATIVE FOR THE ASSESSEE HAS ALSO POINT-WISE ASSAILED THE ANALYSIS OF THE TERMS OF EMPLOYMENT OF THE CONSULTANTS DISCU SSED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER TO DEMON STRATE THAT THE ISSUE HAS BEEN IMPROPERLY APPRECIATED BY THE LOWER AUTHORITIES. IT HAS ALSO BEEN POINTED OUT THAT IN AN IDENTICAL SITUATIO N INVOLVING THE CASE OF AN ADVERTISING/MARKETING SERVICES COMPANY, SUCH PA YMENTS ON HIRING OF CONSULTANTS HAVE BEEN HELD TO BE SUBJECTED TO TAX D EDUCTION AT SOURCE UNDER SECTION 194J OF THE ACT BY THE MUMBAI TRIBUNA L IN THE CASE OF DCIT VS. MADISON COMMUNICATION PVT. LTD. IN ITA NOS . 4991&4992/MUM/2013 & C.O NOS. 207 & 208/MUM/2014 D ATED 29/10/2014, A COPY OF WHICH HAS ALSO BEEN PLACED O N RECORD. 5 OGILVY & MATHER P. LTD. 5. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATI VE HAS PRIMARILY RELIED UPON THE DISCUSSION MADE BY ASSES SING OFFICER IN PARA 9.3 OF THE ASSESSMENT ORDER TO POINT OUT THAT THE P ECULIAR FEATURES IN THE LETTERS OF APPOINTMENT ISSUED TO THE CONSULTANT S ESTABLISHED THAT THERE EXISTED AN EMPLOYER-EMPLOYEE RELATIONSHIP AND THUS, TAX WAS REQUIRED TO BE DEDUCTED IN TERMS OF SECTION 192 OF THE ACT AND NOT UNDER SECTION 194J OF THE ACT. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. OSTENSIBLY, THE TERMS AND CONDITIONS OF APPOINTMENT OF CREATIVE CONSULTANTS BY THE ASSESSEE DOES ESTABLISH THAT IT IS A CASE WHERE ASS ESSEE HAS HIRED THE SERVICES OF INDEPENDENT PROFESSIONALS IN CONNECTION WITH ITS ACTIVITY OF RENDERING ADVERTISING/MARKETING COMMUNICATION SERVI CES TO ITS CLIENTS. NOTABLY THE CONSULTANTS HIRED BY THE ASSESSEE HAVE CHARGED SERVICE TAX FROM THE ASSESSEE AND THEY ARE NOT ENTITLED TO ANY BENEFITS OF EMPLOYMENT WHICH ARE NORMALLY ASSOCIATED WITH AN EM PLOYER- EMPLOYEE RELATIONSHIP, NAMELY PROVIDENT FUND, GRATU ITY, LEAVE ENCASHMENT, ETC. SO HOWEVER, THE CASE SET UP BY T HE ASSESSING OFFICER IS THAT THE TERMS OF EMPLOYMENT INVOLVE RENDERING OF SERVICES FOR FIXED PERIOD; UTILIZING THE INFRASTRUCTURE FACILITIES AND CONSUMABLES PROVIDED BY THE ASSESSEE COMPANY IN RENDERING SERVICES; RE STRICTION ON THE CONSULTANTS TO WORK OUT OF THE PREMISES OF THE A SSESSEE, ETC. ON THIS ASPECT, LD. REPRESENTATIVE FOR THE ASSESSEE HAS EXP LAINED THAT HAVING REGARD TO THE NATURE OF BUSINESS OF THE ASSESSEE, IT WAS FUNCTIONALLY AND OTHERWISE FOUND DESIRABLE THAT SUCH CONSULTANT S WORK OUT OF THE PREMISES OF THE ASSESSEE FOR REASONS OF CONFIDENTIA LITY, ETC. IT HAS BEEN POINTED OUT THAT THE CONSULTANTS ARE NOT PROHIBITED FROM RENDERING 6 OGILVY & MATHER P. LTD. SERVICES TO OTHER CONCERNS, BUT THE ONLY RESTRICT ION BEING THAT THEY ARE NOT ENTITLED TO RENDER SERVICES IN THE SIMILAR FIEL D AS BEING RENDERED TO THE ASSESSEE. IT HAS BEEN EXPLAINED THAT THE AFORE SAID CONDITION IS A MECHANISM TO SAFEGUARD THE INTEREST OF THE ASS ESSEE COMPANY TO PROTECT ITS OWN BUSINESS FROM THE COMPETITORS. 6.1 IN OUR CONSIDERED OPINION, THE RESTRICTIVE COVE NANTS WHICH ARE SOUGHT TO BE INTERPRETED BY THE ASSESSING OFFICER TO MEAN THAT IT ESTABLISHES AN EMPLOYER-EMPLOYEE RELATIONSHIP BETWE EN ASSESSEE AND THE CONSULTANTS HAVE TO BE UNDERSTOOD IN THE CONTE XT OF THE BUSINESS REALITIES IN WHICH THE ASSESSEE OPERATES. SUCH RES TRICTIONS CANNOT IMBIBE AN EMPLOYER-EMPLOYEE RELATIONSHIP TO THE CON TRACT WITH CONSULTANTS. IT IS ALSO QUITE CLEAR THAT THAT THE BENEFITS OF AN EMPLOYER- EMPLOYEE RELATIONSHIP WHICH ARE NORMALLY AVAILABLE, DO NOT APPLY TO THE IMPUGNED CONSULTANTS, FOR INSTANCE, PROVIDENT F UND, LEAVE ENCASHMENT, GRATUITY BENEFITS, ETC. IN A SIMILAR SITUATION, OUR CO- ORDINATE BENCH IN THE CASE OF DCIT VS. MADISON COMM UNICATION PVT. LTD (SUPRA) HAS ALSO UPHELD THE STAND OF THE ASSESSEE T HAT SUCH PAYMENTS ARE SUBJECT TO DEDUCTION OF TAX AT SOURCE UNDER SEC TION 194J OF THE ACT AND NOT UNDER SECTION 192 OF THE ACT. THE FOLLOWIN G DISCUSSION IN THE ORDER OF THE TRIBUNAL IS RELEVANT :- 10. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AU THORITIES BELOW. THE APPOINTMENT LETTER CLEARLY SHOWS THAT THE PERSONS H AVE BEEN APPOINTED AS A CONSULTANT. THOUGH THERE IS A RESTRICTIVE CLAUSE T HAT DURING THE PENDENCY OF AGREEMENT WITH THE ASSESSEE, THE CONSULTANTS WILL N OT TAKE UP ANY OTHER ASSIGNMENT OF TEMPORARY OR PERMANENT NATURE WITH AN Y OTHER PERSON. HOWEVER, IN OUR CONSIDERED OPINION, SUCH RESTRICTIV E COVENANTS ARE PROVIDED IN CONTRACT TO SAFEGUARD THE INTEREST OF THE COMPAN Y AND TO MAKE IT SURE THAT THE CONSULTANTS DO NOT GIVEN SERVICES TO THE RIVALS IN THE SAME LINE OF BUSINESS. MERELY BECAUSE OF HIS RESTRICTIVE COVENA NT, NO EMPLOYER-EMPLOYEE RELATIONSHIP COULD BE ESTABLISHED. FURTHER, IT IS AN UNDISPUTED FACT THAT THE 7 OGILVY & MATHER P. LTD. CONSULTANTS HAVE CHARGED SERVICE TAX TO THE ASSESSE E AND SERVICE TAX SO COLLECTED HAVE BEEN PAID TO THE GOVERNMENT. BY AN Y STRETCH OF IMAGINATION NO EMPLOYEE WOULD CHARGE SERVICE TAX TO ITS EMPLOYE R. THEREFORE, WE DO NOT FIND ANY MERIT IN THE VIEWS TAKEN BY THE REVENUE AU THORITIES. THE ASSESSEE HAS CORRECTLY DEDUCTED THE TAX. WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O TO ACCEPT THE ASSESSE ES CONTENTION 6.2 IN CONCLUSION, WE THEREFORE, UPHOLD THE PLEA OF THE ASSESSEE AND SET ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESS ING OFFICER TO TREAT THE PAYMENTS MADE TO THE CREATIVE CONSULTANTS AS LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER SECTION 194J OF THE ACT AND NOT UNDER SECTION 192 OF THE ACT. AS A CONSEQUENCE, THE DEMAND RAISED ON AC COUNT OF SHORTFALL OF DEDUCTION OF TAX AT SOURCE UNDER SECTION 201(1) OF THE ACT AND INTEREST UNDER SECTION 201(1A) OF THE ACT QUA THE A FORESAID ISSUE IS HEREBY SET ASIDE. 6.3 IN THE ABOVE MANNER, THE APPEAL OF THE ASSESSEE IN ITA NO.6800/MUM/2012 FOR A.Y 2010-11 STANDS ALLOWED. 7. IN THE CROSS APPEAL OF THE REVENUE FOR A.Y 2010- 11, VIDE ITA NO.7380/MUM/2012, THE ONLY ISSUE RAISED IS WITH REG ARD TO THE DEDUCTION OF TAX AT SOURCE ON THE PAYMENTS OF HOARD ING CHARGES MADE TO VARIOUS PARTIES. THE STAND OF THE ASSESSING OFF ICER IS THAT THE PAYMENT OF HOARDING CHARGES IS TO BE UNDERSTOOD AS RENT AND, THEREFORE, WAS LIABLE FOR DEDUCTION OF TAX AT SOU RCE UNDER SECTION 194I OF THE ACT, WHEREAS THE CLAIM OF THE ASSESSEE HAS B EEN THAT SUCH PAYMENTS ARE LIABLE FOR DEDUCTION OF TAX AT SOURCE IN TERMS OF SECTION 194C OF THE ACT. 7.1 ON THIS ASPECT, IT WAS A COMMON POINT BETWEEN T HE PARTIES THAT SIMILAR ISSUE CAME UP BEFORE DELHI BENCH OF THE TRI BUNAL FOR A.Y 2002- 03 IN ASSESSEES OWN CASE AND VIDE ITA NO.5202/DEL/ 2004 AND CO 8 OGILVY & MATHER P. LTD. NO.104/DEL/2005 DATED 23/09/2005, THE TRIBUNAL UPH ELD THE STAND OF THE ASSESSEE. 7.2 WE HAVE CAREFULLY PERUSED THE DECISION OF THE T RIBUNAL DATED 23/9/2005(SUPRA) AND FIND THAT AFTER CONSIDERING TH E NATURE OF WORK AND SERVICES RENDERED BY THE ASSESSEE AGAINST THE I MPUGNED PAYMENT OF HOARDING CHARGES, THE TRIBUNAL CAME TO CONCLUD E THAT SUCH PAYMENTS WERE LIABLE FOR DEDUCTION OF TAX AT SOURC E IN TERMS OF SECTION 194C OF THE ACT AND NOT UNDER SECTION 194-I OF THE ACT AS CONTENDED BY THE REVENUE. THE FOLLOWING DISCUSSION IN THE ORDER OF THE TRIBUNAL DATED 23/5/2005(SUPRA), IS WORTHY OF NOTICE:- 9. WE HAVE CAREFULLY CONSIDERED THE ENTIRE MATERIA L ON RECORD AND FIND THAT THE LD. CIT(A) VERY CAREFULLY CONSIDERED THE RELEVA NT CASE LAW AND THE CIRCULAR OF THE BOARD. HE HAS UNDERTAKEN A PROPER ANALYSIS AND EXAMINATION OF THE NATURE OF WORK DONE BY THE ASSESSEE. THE LD. CIT(A ) HAS ALSO TAKEN INTO ACCOUNT THE ASPECT THAT THE WORK OF ADVERTISEMENT I NCLUDES VARIOUS SERVICES AND THUS THE PAYMENT WAS MADE BY THE ASSESSEE FOR C OMPOSITE SERVICES AND NOT FOR HIRING ANY PREMISES OR LAND OR BUILDING. I N THE CASE OF NATIONAL PANASONIC INDIA PVT. LTD., DELHI BENCH D OF ITAT (SUPRA) HAS OBSERVED AS UNDER: 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS AND THE MATERIAL ON RECORD. SECTION, 194-I OF THE ACT MAND ATES A PERSON, OTHER THAN AN INDIVIDUAL OR A HINDU UNDIVIDED FAMIL Y (HUF), PAYING RENT TO A RESIDENT TO DEDUCT TAX AT SOURCE AT THE T IME OF CREDIT OR PAYMENT, WHICHEVER IS EARLIER. CLAUSE (I) OF THE E XPLANATION TO SECTION 194-I GIVES THE MEANING OF RENTTO BE A PAYMENT U NDER ANY LEASE, SUB-LEASE, TENANCY OR ANY OTHER BUILDING (INCLUDING FACTORY BUILDING), TOGETHER WITH FURNITURE, FITTINGS AND THE LAND APPU RTENANT THERETO, WHETHER OR NOT SUCH BUILDING IS OWNED BY THE PAYEE. THUS RENT FOR THE PURPOSE OF SECTION 194I, IS ESSENTIALLY A PAYME NT FOR THE USE OF ANY LAND OR BUILDING. IN OTHER WORDS, THE AGREEMEN T OR ARRANGEMENT WHICH GIVES RISE TO THE PAYMENT OF RENT, MUST NECES SARILY BE AN AGREEMENT OR ARRANGEMENT PREDOMINANTLY FOR THE USE OF LAND OR BUILDING. HOWEVER, WHERE THE AGREEMENT IS NOT PRED OMINANTLY FOR THE USE OF LAND OR BUILDING, BUT FOR SOMETHING ELSE , THEN PAYMENT 9 OGILVY & MATHER P. LTD. UNDER THAT AGREEMENT WILL NOT CONSTITUTE RENT EVEN IF THAT SOMETHING ELSE INVOLVES THE USE OF LAND OR BUILDING AS AN IN TEGRAL PART OF OR INCIDENTAL TO THE PREDOMINANT OBJECTIVE OF THE AGRE EMENT. LET US CONSIDER THE FACTS OF THE CASE BEFORE US IN THE LIG HT OF THIS BASIC CONCEPT OF RENT. 9.2. IN THE CASE OF JAPAN AIRLINES (SUPRA), IT HAS BEEN HELD THAT THE SERVICES PROVIDED BY THE AIRPORT AUTHORITY FOR LANDING AND P ARKING OF ITS AIRCRAFT DID NOT AMOUNT TO LEASE OF THE PROPERTY AND, THEREFORE, THE PAYMENTS ARE NOT IN THE NATURE OF RENT AS ENVISAGED UNDER SECTION 194I OF THE ACT. THE TRIBUNAL WHILE DEALING WITH THE DEFINITION OF RENT HAS OBSER VED AS UNDER: 9.6 IN VIEW OF THIS DEFINITION, THERE HAS TO BE EI THER LEASE, SUB-LEASE, TENANCY AGREEMENT OR ARRANGEMENT FOR GOVERNING THE USE OF ANY LAND. SUCH LAND TO BE SPECIFIC PORTION OF LAND AND LEASE ETC. OF SUCH LAND HAS TO REGULATE THE MANNER OF USE OF SUCH LAND OR BUILDING AND ITS TENURE AS WELL AS MANNER OF PAYMENT IN LIEU THE REOF. AFTER TAKING INTO CONSIDERATION THE DEFINITION OF RENT, IT APPAR ENTLY APPEARS TO BE A COMPOSITE CONCEPT. IN BLACKS LAW DICTIONARY, THE TERM RENT MEANS- CONSIDERATION PAID FOR USE OR OCCUPATION OF PROPER TY. IN A BROADER SENSE, IT IS THE COMPENSATION OR FEE PAID, USUALLY PERIODICALLY FOR THE USE OF ANY RENTED PROPERTY, LAND, BUILDING, EQUIPME NT ETC. 9.3 ON GOING THROUGH THE QUESTION NO.2 TO 5 OF CIRC ULAR NO.715 DATED 8.8.1995, IT IS CLEAR THAT THE BOARD HAS CLARIFIED THE ISSUE BY GIVING THE FOLLOWING ANSWER TO THE QUESTION: QUESTION5: WHETHER A CONTRACT FOR PUTTING UP A HOAR DING WOULD BE COVERED UNDER SECTION 194C OR 194I OF THE ACT. ANSWER: THE CONTRACT FOR PUTTING UP A HOARDING IS I N THE NATURE OF ADVERTISING CONTRACT AND PROVISIONS OF SECTION 194C WOULD BE APPLICABLE. IT MAY, HOWEVER, BE CLARIFIED THAT IF A PERSON HAS TAKEN A PARTICULAR SPACE ON RENT AND THEREAFTER SUBLETS THE SAME FULLY OR IN PART FOR PUTTING UP A HOARDING, HE WOULD BE LIABLE TO TDS UNDER SECTION 194I AND NOT UNDER SECTION 194C OF THE ACT. 9.4 FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN APPLYING THE PROVISIONS OF SECTION 194I IN THE CASE OF THE ASSESSEE. ON THE OTHER HAND, THE LD. CIT(A) HAS ADOPTED A VERY CORR ECT INTERPRETATION OF THE RELEVANT PROVISIONS OF SECTION 194I AND 194C AND HA S APPLIED SUCH CONSTRUCTION AFTER PROPERTY APPRECIATING THE FACTS AND CIRCUMSTANCES RELATING TO THIS MATTER INCLUDING THE RELEVANT ASPE CTS OF THE WORK DONE BY THE PERSONS TO WHOM THE PAYMENTS WERE MADE BY THE ASSES SEE. WE, THEREFORE, DO NOT FIND ANY SCOPE TO INTERFERE IN THE FINDINGS OF THE LD. CIT(A), WHICH ARE UPHELD BY US. CONSEQUENTLY, GROUND NOS. 1 TO 5 TAK EN IN THIS APPEAL ARE REJECTED. THE APPEAL IS, THEREFORE, DISMISSED. 10 OGILVY & MATHER P. LTD. 7.3 FOLLOWING THE AFORESAID PRECEDENT, IN ASSESSEE S OWN CASE WHICH HAS BEEN RENDERED UNDER IDENTICAL CIRCUMSTANCES, W E HEREBY AFFIRM THE ACTION OF THE CIT(A) IN HOLDING THAT THE PAYMENT OF HOARDING CHARGES ARE LIABLE FOR DEDUCTION OF TAX AT SOURCE UNDER SEC TION 194C OF THE ACT AND NOT UNDER SECTION 194-I OF THE ACT. THUS, THE APPEAL OF THE REVENUE IS DISMISSED. 8. SIMILARLY, THE ISSUE RAISED IN THE CROSS-APPEAL BY THE ASSESSEE AND REVENUE FOR A.Y 2011-12 ARE SIMILAR TO THOSE CONS IDERED BY US IN THE CROSS-APPEALS FOR A.Y 2010-11 IN THE EARLIER PARAS. THEREFORE, OUR DECISION IN THE CROSS-APPEALS FOR A.Y 2010-11 WOULD APPLY MUTATIS- MUTANDIS IN THE APPEALS FOR ASSESSMENT YEAR 2011- 12 ALSO. THUS, FOR A.Y 2001-12, WHEREAS THE APPEAL OF THE ASSESSEE IS ALLOWED, THAT OF THE REVENUE IS DISMISSED. 9. IN SO FAR AS THE CROSS-OBJECTIONS FILED BY THE ASSESSEE ARE CONCERNED, THEY ARE MERELY IN SUPPORT OF THE ORDER OF THE CIT(A) ON THE POINT RAISED BY THE REVENUE IN ITS APPEALS. SINCE THE APPEALS OF THE REVENUE HAVE ALREADY BEEN DISMISSED, THE CROSS OBJE CTIONS RAISED BY THE ASSESSEE ARE RENDERED INFRUCTUOUS AND ARE HEREB Y DISMISSED. 10. RESULTANTLY, WHEREAS THE APPEALS OF THE ASSESSE E ARE ALLOWED, THE APPEALS FILED BY THE REVENUE AND CROSS-OBJECTION F ILED BY THE ASSESSEE ARE DISMISSED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH AUGUST, 2015 SD/- SD/- (AMIT SHUKLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI,DATED :../08/2015 11 OGILVY & MATHER P. LTD. VM. COPY OF THE ORDER FORWARDED TO : / 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, MUMBA I VM , SR. PS 12 OGILVY & MATHER P. LTD. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 26/08/15 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 27/08/15 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER 13 OGILVY & MATHER P. LTD.