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TMI Blog2015 (3) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... ect the AO to restrict the disallowance to the extent of 5% of only those expenditure which have been incurred in cash as held by ITAT in assessee's own case in [2013 (11) TMI 309 - ITAT MUMBAI]. Payment was for shoot carried on abroad in course of Fast Time's Business and Fast Time has no Permanent Establishment (PE) in India, hence, its profit is taxable only in Thailand as per Article 7 of DTAA between India and Thailand. There is no dispute to the fact that the shoots were held abroad and that Fast Time Ltd. did not have any PE in India. Alternatively, the payments made for shooting, hence, the same was in respect of professional services rendered in abroad. Hence, Article 14 of DTAA will be applicable. Thus, considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. Act, wherein following grounds have been taken :- The Commissioner of Income Tax (Appeals)-3, Mumbai erred: 1. In confirming a disallowance of 5% of production expenses on an estimated ad hoc basis. Without prejudice, the said disallowance was extremely excessive and needed to be further substantially reduced. 2.1 in holding that the sums paid to Fast Time Ltd., Bangkok were subject to a TDS u/s 195 and hence is directing the making a disallowance u/s 40a(i). 2.2 in applying Article 22 of the DTM between India and Thailand in the appellant's case instead of Article 7 as was applicable. 2.3 without prejudice, in holding that TDS was to be done even in respect of reimbursement of expenses - suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r where the self-made voucher existed but whose genuineness was doubted by the AO. In the facts and circumstances of the case and the nature of production of films being such, it would be reasonable to hold that some of the expense incurred under production costs would not be fully verifiable more so being incurred in cash. It is held that it would meet the ends of justice to restrict the disallowance at 5% of production expenses. AO is directed to recalculate the disallowance accordingly while giving effect to this order. 4. We have considered rival contentions and found that expenditures were incurred on production of films. The genuineness of expenditure was not doubted. The CIT(A) also observed that AO has not cited a single instanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his purpose reliance was placed on the decision of ITAT Mumbai Bench in the case of Channel Guide India Ltd. Vs.ACIT, 139 ITD 49. 6. We have considered the rival contentions and found from record that payment was for shoot carried on abroad in course of Fast Time's Business and Fast Time has no Permanent Establishment (PE) in India, hence, its profit is taxable only in Thailand as per Article 7 of DTAA between India and Thailand. There is no dispute to the fact that the shoots were held abroad and that Fast Time Ltd. did not have any PE in India. Alternatively, the payments made for shooting, hence, the same was in respect of professional services rendered in abroad. Hence, Article 14 of DTAA will be applicable. Thus, considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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