Maruthi Movies, Nizamabad V. ITO, Ward - 2, Nizamabad

MA 24/HYD/2011

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 6617 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-06-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 27-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K V N CHARYASRI K J RAO
• Assessee Lawyers: AJAY GANDHI
• Section: 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER M.A. NO. 24/HYD/11 (IN ITA NO.1163/HYD/09) : ASST. YEARS:2006-07 MARUTHI MOVIES, NIZAMABAD. (PAN: AACFM 2765M) V/S- ITO, WARD-2, NIZAMABAD. (APPLICANT) (RESPONDENT) APPLICANT BY : SHRI AJAY GANDHI RESPONDENT BY : SRI K.V.N.CHARYA/SRI K.J. RAO O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: BY THIS MISC. APPLICATION, THE ASSESSEE IS SEEKIN G THE TRIBUNAL TO RECTIFY SOME MISTAKES APPARENT FROM THE ORD ER OF THE TRIBUNAL AND RECALL ITS ORDER DATED 31-12-2010 IN ITA NO.1163/HYD/2009 PASSED FOR THE ASSESSMENT YEAR 2006-07. 2. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IT IS AN ADMITTED FACT THAT THE ASSESSEE MADE THE PAYM ENTS TO THE FILM LABORATORIES ON BEHALF OF THE PRODUCERS AND NOT ON HIS OWN M.A.NO.24/HYD/11 MARUTHI MOVIES, NIZAMABAD. ======================= 2 BEHALF. THE FACTS WERE SUPPORTED BY TDS CERTIFICATE ISSUED BY THE PRODUCER TO THE LABORATORIES WHICH WAS CONFIRMED BY THE AS SESSING OFFICER. HENCE, THE ASSESSEE WAS NOT REQUIRED TO DEDUC T TDS FROM THE PAYMENTS MADE BY IT. THE TRIBUNAL, PERHAPS BY O VERSIGHT IGNORED THE ABOVE FACTS AND SUBMISSIONS. THE DEPARTM ENT HAD RAISED A GROUND CONTENDING THAT SECTION 194J IS NOT AP PLICABLE THEN THE TAX OUGHT TO BE DEDUCTED UNDER SECTION 194C OF T HE ACT. IN THIS REGARD, IT IS SUBMITTED THAT THE SAID GROUND DID NOT A RISE OUT OF THE ORDERS OF THE LOWER AUTHORITIES AND HENCE THE TRIBUNAL OUGHT NOT TO HAVE CONSIDERED THE GROUND OF THE DEPARTMENT. THEREFO RE, THERE IS AN ERROR APPARENT FROM THE RECORD. HENCE, IT IS PRAYED THA T THE ORDER OF THE TRIBUNAL MAY BE RECALLED. ALTERNATIVELY, IT IS SUBMITTED THAT APPROPRIATE ORDERS MAY BE PASSED TAKING INTO CONS IDERATION THE ABOVE ERRORS. IT IS ALSO SUBMITTED THAT THE ASSESS EE HAS NOT CLAIMED ANY EXPENDITURE FOR WHICH THE ALLEGED PAYMENT S WERE MADE IN HIS RETURN OF INCOME AND THEREFORE THERE IS NO QUESTION OF DISALLOWANCE UNDER SECTION 40A (IA) OF THE ACT. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE FULLY SUPPORT ED THE ORDER OF THE TRIBUNAL AND CONTENDED THAT THE DEPARTMENT IS LEGALLY CORRECT IN TAKING GROUND NO.4 CONTENDING THAT THE ASSE SSEE OUGHT TO HAVE DEDUCTED TDS AT LEAST AT 2% AS REQUIRED UNDER SECTION 194C OF THE ACT IF NOT UNDER SECTION 194J OF THE ACT AS THE PAYMENTS MADE BY THE ASSESSEE ARE CONTRACTUAL IN NATU RE. M.A.NO.24/HYD/11 MARUTHI MOVIES, NIZAMABAD. ======================= 3 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE REPRODUCE OUR FINDIN G GIVEN IN THE INSTANT CASE HEREUNDER:- WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE ALSO PERU SED THE ORDER OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR EARLIER YEARS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE AND OT HER MATERIAL ON RECORD. WE FIND THAT THE CIT(A) FOLLOWING THE O RDER OF THE TRIBUNAL IN ASSESSEE'S OWN CASE FOR EARLIER YEARS, HOLDING THAT THE PROVISIONS OF S.194J ARE NOT APPLICABLE TO THE PRINTING AND PROCESSING CHARGES PAID BY THE ASSESSEE, DELETED TH E DISALLOWANCE MADE BY THE ASSESSING OFFICER IN TERMS OF S.40(A)(IA) OF THE ACT. WHILE DOING SO, THE CIT (A ) HAS NOT EXAMINED THE APPLICABILITY OF THE TDS PROVISIONS IN RELATION TO CONTRACTUAL PAYMENTS CONTAINED IN S.194C OF THE ACT . EVEN IF THE PROVISIONS OF S.194C ARE APPLICABLE TO THE PRINTING AND PROCESSING CHARGES PAID BY THE ASSESSEE TO THE LABO RATORIES, DISALLOWANCE IN TERMS OF PROVISIONS OF S. 40(A)(IA) WOULD BE APPLICABLE, SINCE THE ASSESSEE HAS FAILED TO DEDUCT EVEN 2% TAX AT SOURCE IN RELATION TO SUCH PAYMENTS IN TERMS OF S.194C OF THE ACT. SINCE THIS ASPECT OF THE MATTER HAS NOT BEEN E XAMINED EITHER BY THE CIT(A) OR BY THE ASSESSING OFFICER, WE SET A SIDE THE ORDERS OF THE LOWER AUTHORITIES ON THIS ASPECT OF T HE MATTER AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFF ICER, WITH A DIRECTION TO EXAMINE THE APPLICABILITY OF PROVISION S OF S.194C TO THE PRINTING AND PROCESSING CHARGES PAID BY THE ASS ESSEE TOWARDS SUPPLY OF FILMS TO THE LABORATORIES, AND AC CORDINGLY RE- DECIDE THE APPLICABILITY OF THE PROVISIONS OF S.40( A)(IA) OF THE ACT IN RELATION TO SUCH PAYMENTS, IN ACCORDANCE WITH LA W AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASS ESSEE M.A.NO.24/HYD/11 MARUTHI MOVIES, NIZAMABAD. ======================= 4 FROM THE ABOVE, IT IS CLEAR THAT, AFTER CONSIDERING AL L THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE AND ALSO IN VIEW OF THE FACT THAT GROUND NO.4 RAISED BY THE REVE NUE IN THE APPEAL BEFORE THIS TRIBUNAL WAS NOT ARISING OUT OF THE ORDERS OF THE LOWER AUTHORITIES, WE HAVE RESTORED THE ENTIRE MATTER T O THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE TH E APPLICABILITY OF PROVISIONS OF S.194C TO THE PRINTING AND PROCESSING CH ARGES PAID BY THE ASSESSEE TOWARDS SUPPLY OF FILMS TO THE LABOR ATORIES, AND ACCORDINGLY RE-DECIDE THE APPLICABILITY OF THE PROVISI ONS OF SECTION 40(A)(IA) OF THE ACT IN RELATION TO SUCH PAYMENTS, IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTUNITY OF H EARING TO THE ASSESSEE. AFTER GOING THROUGH THE TOTALITY OF FACTS AND THE CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT T HERE IS NO MISTAKE APPARENT FROM THE ORDER OF THE TRIBUNAL AND THE MISC. APPLICATION FILED BY THE ASSESSEE IS DEVOID OF ANY MERIT. 3. IN THE RESULT, THE MISCELLANEOUS APPLICATION FILE D BY THE ASSESSEE STAND REJECTED. ORDER WAS PRONOUNCED IN THE COURT ON 02-06-2011. SD/- SD/- (G.C. GUPTA) (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DATED: 02-06-2011. M.A.NO.24/HYD/11 MARUTHI MOVIES, NIZAMABAD. ======================= 5 COPY FORWARDED TO: 1. M/S. MARUTI MOVIES, 5-5-114, KHALEELWADI,NIZAMABA D. 2. ITO, WARD-2, NIZAMABAD. 3. 4. 5. CIT (A)-VI, HYDERABAD. CIT-V, HYDERABAD. DR, ITAT, HYDERABAD. JMR*