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TMI Blog2015 (10) TMI 2255X X X X Extracts X X X X X X X X Extracts X X X X ..... ness expenditure allowable under sec. 37(1) of the Act. Further, Departmental Representative has merely relied on the order of the Assessing Officer, but could not point out any specific mistake in the order of the Commissioner of Income Tax (Appeals). - Decided against revenue. Non deduction of TDS u/s 194H - commission paid to newspaper vendors - CIT(A) deleted the addition - Held that:- There is no error in the order of the Commissioner of Income Tax (Appeals) in deleting the disallowance on account of commission paid to the newspaper vendors and towards payments of commission to advertising agents under sec. 40(a)(ia). See Bharti Airtel Ltd. Vs. DCIT [2014 (12) TMI 642 - KARNATAKA HIGH COURT] - Decided against revenue. - ITA Nos. 58 & 59/PNJ/2015 - - - Dated:- 7-10-2015 - N. S. Saini, AM And George Mathan, JM For the Appellant : Ms Sharmila Prabhu - CA For the Respondent : Shri Siddappaji R N - DR ORDER Per N. S. Saini, Accountant Member These are the appeals filed by the Revenue against the separate orders of Commissioner of Income Tax (Appeals), Panaji-1, both dated 17/11/2014 for the assessment years 2006-07 2011-12. Assessment Year 2006-07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this case the Hon'ble Mumbai ITAT held that expenditure incurred by the assessee in maintaining its unit is allowable, even though no manufacturing was carried out during the year. The appellant in its submission has distinguished the facts as being different from the case of M/s. J. K. Traders vs. CIT. The content of assessee's submission is reproduced as under: On the outset the appellant wishes to clarify that the appellant has not relied upon the decision of J. K. Traders vs. CIT. The said decision has been relied upon by the Commissioner of Income Tax in his order under section 263. In the above mentioned letter, the appellant has distinguished the said case as the facts differ. The appellant reiterates that in the above ease, the company was not able to commence business for nine years. However, the facts of the appellant's case differ. The appellant had suspended operations temporarily because there was a dispute between the appellant and the principal. In case the dispute would have been sorted out, then the appellant would have to recommence operations immediately. Hence it was prudent on the part of the appellant to maintain the factory in go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counting year to justify the claim of depreciation and that even if the plant and machinery or other asset is kept ready for use in the assessee's business, the assessee would be entitled to depreciation. The only condition is that the business should not have been closed down once for all and that the assessee should demonstrate that the hopes of the business being revived are alive and real. There should be evidence or material to show that the assessee took efforts to keep the business alive in the hope of reviving the same. Maintaining the office and establishment, complying with the statutory formalities, not disposing of the plant and machinery, incurring expenses on the repair of plant and machinery etc. are some of the indications of nurturing the hopes of reviving the business. 6. The Authorized Representative of the assessee submitted that there was dispute with Pepsi Ltd. for which the assessee was doing bottling of aerated soft drinks and therefore, operations of the unit were temporarily suspended and the assessee was trying to resolve the dispute to recommence the business. Hence, expenditure for maintaining the plant and machinery and staff and incurring statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same and added it to the income of the assessee. 10. On appeal, Commissioner of Income Tax (Appeals) allowed deduction to the assessee and while doing so, he held that tax was not deductable at source on the amount of trade discount allowed to the advertising agency and directed the Assessing Officer to delete the disallowance of ₹ 2,76,00,979/-. Further, he held that the Assessing Officer made disallowance under sec. 40(a)(ia) on the ground that payment made to vendors is commission on which TDS provisions are applicable since the vendors have to return unsold copies of newspapers. Therefore, the relationship between newspapers and the vendors is that of principal and agents and therefore, the payments is in the nature of commission. He held that in some cases vendors may have to collect unsold papers and return it to the principal. This act alone cannot change the relationship between the principal and vendor. He held that the decision in the case of ACIT Vs. Samaj (2001) 77 ITD 358 (Cuttack) applies wherein it was held that sale of newspapers at discounted price to the newspaper vendors amounts to discount and not commission. 11. The Revenue in the ground of app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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