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TMI Blog2016 (1) TMI 1184X X X X Extracts X X X X X X X X Extracts X X X X ..... is for publicity and is an allowable expenditure on account of commercial expediency. Merely because the assessee has displayed the said advertisement board to display the Osho Time Magazines and books that are printed and published by the assessee, the same in my opinion cannot be a ground to invoke the provisions of section 194I for the amount paid to Shunyo Foundation, which incurs the expenditure for maintenance of that park. The Assessing Officer, has wrongly invoked the provisions of section 194I - Decided in favour of assessee. - ITA No.1139/PN/2016 - - - Dated:- 11-1-2016 - SHRI R.K. PANDA, AM For The Appellant : Shri M.C. Naniwadekar For The Respondent : Shri Suhas Kulkarni ORDER PER R.K.PANDA, AM : Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the famous public Park known as Osho Teeth Garden located at Koregaon Park, Pune. The said garden is a famous tourist place and every day hundreds of people visit the said Garden. Shunyo Foundation, Poona is looking after the maintenance the said Garden. The day to day expenses for upkeep, beautification and maintenance of the Osho Teerth Park is incurred by Shunyo foundation. The company has sponsored an amount of ₹ 15,00,000/- to the said foundation to meet the maintenance expenses of the above park. The company has incurred the said expenditure as social responsibility, as the benefit of the same is availed by hundred's of people who visit the said park on daily basis. Copy of the ledger account for payment made to Shunyo found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or displaying Magazines and books for which compensation of ₹ 15 lakhs has been made through Shunyo Foundation which incurs the same on maintenance of that park. Therefore, the assessee company was liable to deduct tax u/s.194I of the Act. Since the assessee has failed to do so the Assessing Officer, invoking the provisions of section 40(a)(ia), made disallowance of ₹ 15 lakhs and added the same to the total income of the assessee. 5. Before the CIT(A) the assessee more or less reiterated the same arguments. However, the CIT(A) also was not impressed by the arguments advanced by the assessee and upheld the action of the Assessing Officer by observing as under : 4.6 I have perused the material on record and the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. on the said nallah park. Though an attempt has been made by the appellant company, to use the nomenclature of maintenance to the said payment, by producing documents and letters between Shunyo Foundation and the appellant company, this does not change the nature of the purpose for which the payment and the head under which, it is made. The documents produced are between two closely related entities, though, legally may be separate entities, working with the same purpose of propagating the philosophy of Osho, and hence, the documents cannot be relied on to decide on the nature of the payments, when facts indicate otherwise. In view of the above, the AO has thereby correctly held that the appellant company is required to deduct tax u/s. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4I. Referring to the provisions of section 194I the Ld. Counsel for the assessee drew the attention of the Bench to the Explanation to the provisions of section 194I and submitted that for the purpose of this section rent means any payment by whatever name called under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land or building, land appurtenant to a building etc. Therefore, the provision of section 194I is not applicable. The payment of ₹ 15 lakhs has been paid to Shunyo Foundation for beautification and maintenance of the park which is used by the people at large. He accordingly submitted that the order of the CIT(A) should be set aside and the ground raised by the assessee should be allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the public at large as a tourist spot, therefore, the provisions of section 194I are not applicable to the facts of the present case. 9. I find some force in the above argument of the Ld. Counsel for the assessee. I find the Hon ble Bombay High Court in the case of CIT Vs. Maharashtra State Electricity Distribution Company Limited (Supra) while deciding the applicability of provisions of section 194I has held as under : 37. In our view, the expression rent would also entail an element of possession. In each of the instances contemplated by the explanation to Section 194-1, we see in them an element of possession, be it land, building (including factory building), land appertaining to a building, plant equipment, furniture or fitti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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