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2015 (8) TMI 1357 - AT - Income TaxTDS u/s 194C - treatment to Vasco sports club and Cause of our joy - whether are not advertisement agencies and therefore the assessee-company is not liable for deduction of TDS u/s. 194C in respect of payments made to the above parties towards sponsorship and publicity? - Held that - Admittedly a perusal of the provisions of Sec. 194C of the Act clearly shows that the said provision has been amended w.e.f. 1.10.2009 whereby TDS has been made liable in respect of advertisements at 1%. As the said amendment has taken place only w.e.f. 1.10.2009 relevant to the A.Y 2010-11 and the assessment year under appeal is A.Y 2008-09 the said provisions of Sec. 194C would not attract to the said two payments made by the Assessee to Vasco Sports Club and Cause of our joy . In these circumstances we are of the view that the deletion as made by the ld. CIT(A) is on a right footing and does not call for any interference. In the result the appeal of the Revenue stands dismissed. Money paid to the workers of the port - allowable business expenditure - Held that - the Assessee is unable to even prove that the said amounts have been disbursed in the course of the business of the Assessee and was incurred for the purpose of the business of the Assessee. True the payment of speed money to the workers at the port cannot be treated as an illegal payment and consequently the explanation to Sec. 37(1) would not apply. However it is for the Assessee to prove that the said money has been paid to the workers of the port. Just by saying that the payments have been made to the workers in the port does not substantiate the claim. It should be supported with some documentary evidences. The port area is a secured area. The workers there would have names and would be given identification cards. ID numbers would atleast be available. Even these have not been provided by the Assessee. As the Assessee has not been able to prove the basic fact that the expenditure was incurred for the purpose of the business of the Assessee and that the payments made were disbursed to the port workers we are of the view that the disallowance made by the AO is liable to be restored - Decided against assessee
Issues involved:
- Appeal by Revenue against CIT(A) order for A.Y 2008-09 - Cross objection by Assessee in Revenue's appeal for A.Y 2008-09 - Appeal by Revenue against CIT(A) order for A.Y 2010-11 - Cross objection by Assessee in Revenue's appeal for A.Y 2010-11 - Appeal by Revenue against CIT(A) order for A.Y 2011-12 - Cross objection by Assessee in Revenue's appeal for A.Y 2011-12 ITA NO. 198/PNJ/2015 & CO NO. 25/PNJ/2015: The Revenue appealed against CIT(A)'s decision on whether TDS deduction under Sec. 194C was required for payments to sports clubs for sponsorship. The Revenue argued that the payments were for advertisements and TDS should have been deducted. The CIT(A) allowed the Assessee's claim, stating the payments were not for advertisements. The ITAT agreed, noting the relevant amendment to Sec. 194C was for A.Y 2010-11, not the relevant A.Y 2008-09. The appeal by Revenue was dismissed. ITA NOS. 199 & 200/PNJ/2015 & CO NOS. 26 & 27/PNJ/2015: The Revenue appealed against CIT(A)'s decision to allow speed money payments as legitimate business expenditure. The Revenue argued lack of evidence and burden of proof on the Assessee. The CIT(A) ruled in favor of the Assessee, citing a Tribunal decision. The ITAT found insufficient evidence of payments made by the Assessee, noting discrepancies in vouchers and lack of recipient details. The ITAT reversed CIT(A)'s decision, stating the Assessee failed to prove the payments were for business purposes. The Revenue's appeals were allowed, and the orders of CIT(A) were reversed. In conclusion, ITA No. 198/PNJ/2015 was dismissed, while ITA Nos. 199 & 200/PNJ/2015 were allowed. The Cross objections were dismissed in all cases.
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