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TMI Blog2017 (5) TMI 1592X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(26) and is a company resident in India u/s 6(3). All payment made to this company towards advertisement charges is in Indian currency. Tax is deducted at source on such payment u/s 194C. Sec. 195 is applicable when payment is made to a non resident. Admittedly, payment to Group M Media India Pvt. Ltd. is a payment to resident and not a non resident. Therefore, section 195 is not attracted. The AO has not disputed the genuineness of the payment and therefore only because there is no agreement for the advertisement work with this company cannot be viewed adversely. Thus disallowance made by the AO is incorrect, against law and the same is deleted. The order has admitted that bills and vouchers of expenses, as desired, were produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in deleting the addition of ₹ 23,44,747/- and allowing deduction u/s 37, on account of advertisement expenses specifically when the payment was made to a foreign company which was liable to deduction of tax at source in view of section 195, the failure of which attracted section 40(a)(ia)? (iii) Whether the Tribunal was legally justified in deleting the addition of ₹ 37,14,84,213/- and allowing deduction u/s 37 on account of advertisement expenses and trade incentive expenses specifically when the payment was made which was liable to deduction of tax at source u/s. 194C, the failure of which attracted section 40(a)(ia) as the details of payment and TDS were not furnished? 3. In so far as issue No.(i) is concerned, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off is fully allowable. 4. Therefore, the observations made by the Tribunal in the earlier year where appeal was preferred but this question was not admitted and the same issue is squarely covered by the decision on issue No.(ii) of appeal No.134/2014 as above. 5. Regarding issue No.(ii) (iii), the same are covered by the decision on issue No.(iv) (v) of appeal No.134/2014, wherein the following reasoning was adopted. 6. Regarding issue No.(iv) (v) counsel has relied upon the decision of the Supreme Court in the case of Commissioner of Income Tax. vs. Alfa Laval (India) Ltd. [2007] 295 ITR 0451 and the decision of Bombay High Court in the case of Commissioner of Income Tax vs. Retilal Becharlal Sons and Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law and the same is deleted. So far as expenses on trade incentive is concerned, we find that similar incentives given as per various schemes in earlier years has been allowed. The AO at Page 2 of the order has admitted that bills and vouchers of expenses, as desired, were produced for verification which was test checked. The observation of AO that services has been received by the assessee against these payment and therefore he should have deducted tax at source on the value of the gift is ill founded in as much as the payment is not against the services but against the sale of goods to the distributors and therefore TDS provisions are not applicable. Therefore, the disallowance of ₹ 16,17,24,303/- made by the AO on this account is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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