2017 (9) TMI 1514 - AT - Income Tax

TDS u/s 194C or 194I - payment made as advertisement on hoardings - Held that - As decided in assessee s own case the assessee has entered into a contract with other parties for display of advertisement of its client and the transaction is purely in the nature of contract for the work of advertising as defined in clause VA of Explanation to section 194C of the Act.

Summary

Issues:
- Appeal and cross objection against orders passed by Ld. CIT (Appeals)-59, Mumbai for the assessment year 2012-13.
- Interpretation of sections 194C and 194I of the Income Tax Act, 1961 regarding payments for hoarding/display rights.
- Challenge by revenue on the deletion of additions made under sections 201(1) and 201(1A) by Ld. CIT (A).
- Correct application of the amended definition of rent under section 194I.
- Interest levied under section 201(1A) without considering advance tax payments by deductees or payees.

Detailed Analysis:

1. The appeal and cross objection were filed against the orders passed by Ld. CIT (Appeals)-59, Mumbai for the assessment year 2012-13. The appeal pertained to the revenue and the assessee challenging the orders dated 06/04/2015. The Ld. CIT(A) had partially allowed the appeal filed by the assessee against the order passed under sections 201/201(1A) of the Income Tax Act, 1961.

2. The main issue revolved around the interpretation of sections 194C and 194I of the Act concerning payments for hoarding/display rights. The AO had raised a demand of ?4,59,58,112 under sections 201(1) and 201(1)(A) of the Act. The Ld. CIT(A) granted partial relief to the assessee based on a previous decision by ITAT Mumbai. The revenue challenged this decision before the Tribunal.

3. The revenue challenged the impugned order primarily on the grounds that the payments for hoarding/display rights should fall under section 194I, not 194C. They argued that the Ld. CIT (A) erred in not considering the amended definition of rent under section 194I, which broadened the scope of rent payments.

4. The Ld. departmental representative contended that the Ld. CIT(A) wrongly deleted the additions made under sections 201/201(1A) of the Act. They argued that as per the amended definition of rent under section 194I, the payments for hoarding/display rights should be classified under section 194I, not 194C.

5. The Ld. Counsel for the assessee defended the Ld. CIT (A)'s decision, citing a previous order by ITAT Mumbai in favor of the assessee. They argued that the payments made for advertisement on hoardings should be treated under section 194C, not 194I. Additionally, they raised concerns about the interest levied under section 201(1A) without considering advance tax payments by the deductees or payees.

6. The Tribunal upheld the Ld. CIT(A)'s order, stating that the issue had already been decided in favor of the assessee in previous cases. They emphasized that the transaction was in the nature of a contract for advertising services, falling under section 194C. The Tribunal dismissed the revenue's appeal, affirming the Ld. CIT(A)'s decision.

7. Regarding the cross objection filed by the assessee, since the Tribunal dismissed the revenue's appeal and upheld the Ld. CIT(A)'s order, the cross objection became infructuous and was consequently dismissed.

In conclusion, the appeal filed by the revenue and the cross objection filed by the assessee for the assessment year 2012-13 were both dismissed based on the Tribunal's analysis and decision.