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2020 (9) TMI 867 - AT - Income TaxShort deduction of TDS - tds u/s 194J or u/s 194C - assessee being resident corporate assessee is stated to be engaged in the marketing and distribution of home video VCDs DVDs etc - HELD THAT - Remand proceedings was well elaborated by the assessee before Ld. CIT(A) in its submissions dated 24/01/2018 wherein the attention was brought to the fact that assessee s submissions during remand proceedings were considered, deliberated and verified by Ld. AO and a finding was rendered that TDS was deducted at correct rates u/s 194C. Lastly, the fact of remand proceedings was noted by Ld. CIT(A) also at para 2.3 of the impugned order. Therefore, Ld. CIT(A), in our opinion, has erred in not considering the findings rendered by Ld. AO in the remand proceedings wherein it has been clearly stated that tax was correctly deducted u/s 194C. In that case, nothing survives against the assessee. Therefore, by deleting the impugned demand, we allow the appeal.
Issues Involved:
Appeals challenging disallowance of expenses for TDS, consideration of additional evidence, correctness of TDS deductions under sections 194C and 194J, remand proceedings, and demand raised against the assessee. Analysis: Issue 1: Disallowance of Expenses for TDS - The assessee contested the disallowance of expenses for TDS, arguing that the correct nature of the expense was not considered by the Commissioner of Income Tax Appeals (CIT(A)). - The CIT(A) treated the explanation and clarifications as additional evidence, disallowing them under Rule 46A of the Act. - The CIT(A) upheld the demand against the assessee, who argued that similar grounds were accepted in a previous assessment year. - The Tribunal found that the charges paid to the parties fell under section 194C, and the TDS was correctly deducted. Therefore, the demand was deleted, and the appeal was allowed. Issue 2: Consideration of Additional Evidence - The assessee submitted additional evidence to support their case before the CIT(A) but was refused admission under Rule 46A for failing to demonstrate sufficient cause. - The Tribunal noted that the remand proceedings were initiated, and the Assessing Officer (AO) confirmed that TDS was correctly deducted under section 194C. - The Tribunal held that the CIT(A) erred in not considering the findings from the remand proceedings, leading to the deletion of the demand and allowing the appeal. Issue 3: Correctness of TDS Deductions under Sections 194C and 194J - The AO alleged that the assessee failed to deduct TDS at the proper rates under sections 194C and 194J, resulting in a demand against the assessee. - Upon review, the Tribunal found that the TDS was correctly deducted under section 194C based on the nature of services rendered by the payees. - The Tribunal deleted the demand for Assessment Years 2009-10 and 2008-09 as well, as the TDS deductions were deemed appropriate under section 194C. Issue 4: Remand Proceedings - Remand proceedings were initiated against the assessee based on the directions of the CIT(A), and the AO confirmed that the TDS was correctly deducted under section 194C. - The Tribunal considered the remand proceedings and the findings of the AO, concluding that the demand raised against the assessee should be deleted. Conclusion: All the appeals were allowed by the Tribunal, overturning the decisions of the CIT(A) and deleting the demands raised against the assessee. The Tribunal found that the TDS deductions were correctly made under section 194C, based on the nature of services provided by the payees.
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