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TMI Blog2015 (6) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... essee company filed its return of income on 29.09.2011 admitting total income of Rs. 88,24,87,208 and later filed a revised return of income on 15.3.2013 admitting gross total income of Rs. 88,10,55,036. The AO completed the assessment u/s 143(3) of the Act determining the total income of the assessee company at Rs. 540,53,59,193 by making disallowance u/s 40(1)(ia) for non deduction of taxes on payments made to M/s. Usha Kiron Movies Ltd of Rs. 38,66,773, among other disallowances. 3. During the course of assessment proceedings, it was observed that the assessee company had made different payments to M/s Usha Kiron Movies Ltd. Out of this payments, TDS is made on some of the payments, whereas TDS has not been made on some other payments.D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith a composite contract with M/s Usha Kiron Movies Ltd in connection marketing of various facilities created in film city. Hence irrespective of nature of each payment, all the payments should have subjected to TDS. In this connection it is relied on Hon'ble Supreme Court decision in case of Chatturbhuj Vithaldas Jasar v. Moreshwar Parashram (1954) AIR 1954 SC 236. In this case, Hon'ble Apex Court opied as under: "When a contract consists of a number of terms and conditions, each condition does not form a separate contract, but is an item in the one contract of which it is a part. The consideration for each condition in a case like this is the consideration for the contract taken as a while. It is not split up into several consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le for TDS or not under Chapter XVII-B of the Income Tax Act 1961. The CIT (A) failed to note that most of the items for which payments were made were for supply of goods which do not attract the provisions of tax deduction under chapter XCIIB of the I.T. Act. 1961. (b) Without prejudice to the above, the appellant submits that since tax was deducted on payments made to Usha Kiron Movies, though at lower rate, no disallowance is warranted u/s 40(a)(ia)". 8. Further, the assessee raised the following additional grounds: "1. The CIT (A)-V Hyderabad (hereinafter referred to as the "ld CIT (A)") erred in confirming the disallowance of Rs. 38,66,773 made by the ld.AO u/s 40(a)(ia) of the Act without appreciating the fact that the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Thermal Power Corporation (229 ITR 383 (S.C) and the decision of the Hon'ble Bombay High Court in the case of Ahmedabad Electric Company Ltd vs. CIT (199 ITR 351), we admit the additional grounds of appeal. 12. We are of the opinion that the contention of the assessee is to be accepted. If any payment is made towards purchase of articles on which VAT is leviable, then section 194C will not apply for the same. Even if it is assumed that the entire tax is to be taken as a single one and the purchases on which VAT was paid should not be segregated, even then the assessee has paid TDS of Rs. 4,38,590 which is in excess of the required rate u/s 194C on the total value of the contract amounting to Rs. 1,27,66,093. Further the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt upheld the judgment of the Hon'ble High Court of Andhra Pradesh dismissing the SLP filed by the Revenue in SLP No.9454/2014. In this view of the matter, respectfully following the decision of the jurisdictional High Court, whose decision was upheld by the Hon'ble Supreme Court, we dismiss the appeal of the Revenue regarding disallowance of interest/dividend paid to the subscribers without deduction of tax. 16. The next issue is regarding proportionate disallowance of expenses on the ground that different Officers of the assessee company made collection on behalf of its subsidiary companies and accordingly proportionate expenses apportioned on the basis of collection were disallowed by the AO. 17. Before the CIT (A), assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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