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TMI Blog2013 (12) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... Held that:- No details have been filed by the assessee to examine whether any personal expenditure can be said to have been incurred – Partly allowed in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... d not apply between (C) & (D) and accordingly (C) i.e. Ram Advertising Service has not applied these provisions while making payments for advertising to (D) i.e. print / electronic media. However, in the case under consideration contractor (B) i.e. Rave Advertising & Marketing has failed to deduct tax at source u/s 194C(2) while making payments for advertising to subcontractor (C) i.e. Ram Advertising Service. Assessee has further contended that for him Ram Advertising Service is working as Media Buying Agency (AOR) as per rules of Advertising Agencies Association of India, therefore section 194 C is not applicable as per Circular No. 715. Assessee's contention is not acceptable as assessee has nothing on record to prove that Ram Advertising Service is a Media Buying Agency for him and even if it is assumed to be true then Circular No. 715 nowhere mentions that Media Buying Agency (AOR) to be treated at par with media as far as applicability of provisions of TDS u/s 194 C is concerned." 5. Another argument was taken that the provisions of section 194C are not applicable because the assessee's turn over does not exceed Rs. 40 lakhs was rejected because according to Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contractor or for supplying whether wholly or partly any labour which the contractor has undertaken to supply shall, at the time of credit of such sum to the account of the sub-contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to one per cent of such sum as income-tax on income comprised therein: Provided that an individual or a Hindu undivided family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the sub-contractor, shall be liable to deduct income-tax under this sub-section. Explanation I.--For the purposes of sub-section (2), the expression "contractor" shall also include a contractor who is carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the Government of a foreign State or a foreign enterprise or any association or body established outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as purchases from M/s Ram Advertising Service. Alternatively it is the services which can be purchased. 12. The Ld. Counsel had heavily relied on the Circular No. 715 dated 8.8.1995. Through this circular, Board has given clarifications to the various representations made by various business groups in the form of question and answers. The answer to Question No.1 reads as under:-- "Question 1: What would be the scope of an advertising contract for the purpose of section 194C of the Act ? Answer: The term 'advertising' has not been defined in the Act. During the course of the consideration of the Finance Bill, 1995, the Finance Minister clarified on the Floor of the House that the amended provisions of tax deduction at source would apply when a client makes payment to an advertising agency and not when advertising agency makes payment to the media, which includes both print and electronic media. The deduction is required to be made at the rate of 1 per cent. It was further clarified that when an advertising agency makes payments to their models, artists, photographers, etc., the tax shall be deducted at the rate of 5 per cent as applicable to fees for professional and technical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in that case of the spade Work was done by the assessee himself and the finished product was routed through M/s Trishul. Further, in that case M/s Trishul was an AAA accredited agency. In the case before us there is no evidence to show that assessee is not an accredited agency and only M/s Ram Advertising Service is the accredited agency. There is not an iota of evidence to show that assessee has done all the spade work and M/s Ram Advertising Service has not done anything. In the absence of such evidence the decision in the case of Sands Advertising Communications (P.) Ltd. (supra) would not be applicable in these circumstances. We find nothing wrong with the order of Ld. CIT(A) and confirm the same. 16. Ground No.2: During the assessment proceedings, the Assessing Officer disallowed 20% of the staff refreshment and travelling & conveyance expenses by observing that element of personal usage cannot be ruled out. On appeal, disallowance was confirmed by the CIT(A). 17. Before us, Ld. Counsel for the assessee relied on the ground of appeal and on the other hand, the Ld. DR supported the order of CIT(A). After considering the rival submissions, we find that disallowance seems to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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