2019 (9) TMI 1079 - AT - Income Tax

TDS u/s 194C or 194I - Expenses on Advertising and Exhibition - demand under section 201(1)/201(1A) - HELD THAT - The basic evidence to prove the contention of assessee was contract between assessee and the organisers, which assessee failed to produce before A.O. CIT(A) rejected the request for admission of the additional evidences. Whatever contention have been raised by the assessee, have not been substantiated through any evidence or material on record. Therefore, stand proved that assessee paid the amount in question to the Jewellery Market Exhibition for giving stall for exhibition. Thus, space is allotted to the assessee for carrying-out its business activities. Thus, a property for a limited time have been rented out to the assessee. Thus, the assessee were liable to deduct TDS under section 194-I - In the absence of any evidence on record, no interference is called for in the matter. The assessee, lastly relied upon Judgment of Hon ble Supreme Court in the case of M/s. Japan Airlines Company Ltd., vs., CIT, New Delhi 2015 (8) TMI 185 - SUPREME COURT . TDS u/s 194C - reimbursements of expenses or not - addition under the Head Printing and Stationery - HELD THAT - CIT(A) specifically found that assessee has claimed these expenditure in its books of account. It was further found that the payment is shown in the name of M/s. Balaji and M/s. Allshreshtha who have provided the services to the assessee and not in the name of the customers. The finding of fact recorded by the Ld. CIT(A) have not been rebutted by the assessee in any manner. Therefore, contention of assessee that it was reimbursement of expenses is without any basis. The assessee was, thus, liable to deduct TDS under section 194C of the I.T. Act, 1961 on such payments.

Summary

Issues:
1. Challenge to order under section 201(1)/201(1A) of the Income Tax Act, 1961.
2. Classification of expenses on Advertising and Exhibition under section 194C or 194-I.
3. Addition of amount under "Printing and Stationery" and applicability of section 194C.

Issue 1:
The appeal was directed against the order of Ld. CIT(A)-41, New Delhi, for the A.Y. 2013-2014, challenging the Order under section 201(1)/201(1A) of the Income Tax Act, 1961. The authorities below noted that the assessee paid an amount for giving a stall for exhibition, which was held to be in the nature of rent paid for stall and covered under section 194-I. The additional evidence filed by the assessee was not found admissible under Rule 46A of the Income Tax Rules. The Ld. CIT(A) upheld the decision that the payment was in the nature of rent and not for special services, thus rejecting the ground of appeal. However, the plea that TDS is not deductible on the service tax component was accepted.

Issue 2:
The assessee challenged the Order of the Ld. CIT(A) regarding the classification of expenses on Advertising and Exhibition under section 194C or 194-I. The assessee claimed that the payment was for various services provided by the Exhibition Organisers, not just for rental space, and hence, TDS was correctly deducted under section 194C. The authorities held that the payment was for rental as well as other services, and the assessee failed to produce a contract between the assessee and the organisers. The contention of the assessee was not substantiated with evidence. The Tribunal dismissed the ground of appeal, citing a Supreme Court judgment to support the decision.

Issue 3:
The challenge was made against the addition of an amount under "Printing and Stationery" and the applicability of section 194C. The assessee claimed that the payment was reimbursement of expenses incurred by customers, and hence, tax was not deductible. However, the Ld. CIT(A) noted that the payment was made to service providers, not customers, and the liability to deduct tax lay with the assessee. The Tribunal found that the expenditure was claimed in the books of account and the payment was made to service providers, not customers, leading to the dismissal of the ground of appeal.

In conclusion, the appeal of the Assessee was dismissed after detailed analysis and consideration of the issues involved in the judgment delivered by the Appellate Tribunal ITAT Delhi.