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TMI Blog2020 (12) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... t is a case of short deduction of TDS and not non-deduction of TDS. In the circumstances no disallowance is attracted u/s. 40(a)(ia) of the Act. Thus, we sustain the order of the Ld.CIT(A) and reject the grounds raised by the revenue on this issue. Disallowance made towards commission expenses - CIT-A deleted the addition - HELD THAT:- Assessing Officer has disallowed the expenditure without any contrary evidences in possession. It is very evident from the assessment order itself that by letter dated 07.03.2014, the Assessee has submitted detailed break-up of the expenses. The Assessing Officer has not demonstrated as to why this commission expenditure is ingenuine and is not allowable. Since the Assessing Officer has not substantiated his reasoning and has not pointed out any defect in the claim of the Appellant, such disallowance of commission expenditure cannot be sustained. The Assessing Officer is therefore, directed to delete the disallowance of commission expenditure correctly - Decided against revenue. - ITA NO. 6784/MUM/2016 - - - Dated:- 11-12-2020 - Shri C.N. Prasad, Hon'ble Judicial Member And Shri S. Rifaur Rahman, Hon'ble Accountant Member For th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment in the case of CIT Vs S.K.Tekriwal (supra). 5. Whether on the facts, in the circumstances of the case and as per law, the Ld. CIT(A) has erred in directing to delete the disallowance of commission payments without appreciating that the assessee has failed to submit any supporting details at the time of assessment proceedings and the purpose of such payments and its business exigencies were never proved by the assessee. 6. The appellant prays that the order of the Ld.CIT(A) on the above grounds be set-aside and that of the Assessing Officer be restored. 3. Ground Nos. 1, 2 and 4 relates to disallowance made u/s. 40(a)(ia) of the Act for non-deduction of TDS under the provisions of section 194J of the Act in respect of 'Carriage Fees/Channel Placement fees'. 4. Briefly stated the facts are that, during the assessment year under consideration assessee paid 'Carriage Fees/Channel Placement fees' by deducting TDS @2% u/s. 194C of the Act. However, Assessing Officer was of the view that 'Carriage Fees/Channel Placement fees' paid by the assessee is in the nature of royalty and therefore assessee should have deducted TDS under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is no dispute that the payment in question was made by the assessee to the cable operators/ MSOs for placing the TV channels in the prime band in order to enhance the viewership and better advertisement revenue. In the case of Kurukshetra Darpans (P) Ltd. Vs. CIT (supra), the Hon ble High Court of Punjab Haryana while dealing with an identical question has held in para 13 to 18 as under: - 13. After hearing learned counsel for the parties, we are of the view that the contentions of the counsel for the appellant are liable to be rejected. Sec. 194C of the Act creates an obligation on a person responsible for paying any sum specifled therein to a person for carrying out any work, to deduct the tax at source.' Presently, we are concerned with the work' as referred to in cl(b) of Expln. III below s.194C(2)of the Act. 14. In terms of the said Explanation. it is provided that expression 'work' shall include inter alia broadcasting and telecasting including production of programmes for such broadcasting and telecasting. By way of such Explanation, it is evident that where the payment is for a work involving broadcasting and telecasting. the same shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent from the specimen agreement on record, in the business of distribution of satellite based TV channels and has exclusive rights to market and distribute said services in India, the service that is referred to in theagreement is the broadcasting and telecasling of TV signals. 18. For the reasons recorded above. we have no hesitation in concluding that the Tribunal was correct in holding that the assessee was required to deduct tax at source in terms of s. 194C of the Act on payments made to the licensor for obtaining TV signals. cable TV network owned by the assessee. 7. Thus after examination of the Explanation III to the then section 194C, the Hon'ble High Court held that the payment for obtaining the telecast licenses from the licensor falls under the provisions of section 194C. We find that the work of broadcasting/telecasting including production of programme or such broadcasting or telecasting falls under the definition of work as provided under clause (iv) of the Explanation to section 194C which reads as under:- Explanation - For the purpose of this section ********************************* ********************************* (iv) work ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me cases persons responsible for deducting tax at source are deducting such tax by applying more than one provision for the same payment. In particular, it has been pointed out that the sums paid for carrying out work of advertising are being subjected to deduction of tax at source under section 194C as payment for work contract as also under section 1941 as payments of fees for professional services. 2. It is hereby clarified that each section, regarding TDS under Chapter XVII, deals with a particular kind of payment to the exclusion of all other sections is this Chapter. Thus, payment of any sum shall be liable for deduction of tax only under one section. Therefore, a payment is liable for tax deduction only under one section. 10. In view of the above discussion as well as the decisions of Hon ble Punjab Haryana High Court and Hon ble Delhi High Court, we do not find any error or illegality in the impugned order of CIT(A) qua this issue. 4.2. Respectfully following the decision of the Hon'ble Jurisdictional ITAT in the Appellant s own case, the Assessing Officer is directed to delete the disallowance of expenditure of ₹ 38,47,15,704/- 7. On readin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee deducted TDS @2% u/s. 194C instead 10% u/s. 194J. Ld.CIT(A) deleted the disallowance following the decisions of the Hon'ble Calcutta High Court and the Mumbai Tribunal as it was held that no disallowance u/s. 40(a)(ia) of the Act is warranted for short deduction of TDS. 12. We find that an identical issue came up before the Tribunal in the case of M/s. Sapiens Technologies (1982) India Pvt. Ltd., v. DCIT in ITA.Nos. 170 171/Mum/2019 dated 17.09.2020 wherein the Tribunal deleted the disallowance made u/s. 40(a)(ia) of the Act where there is short deduction of TDS observing as under: - 7. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. We noticed that the issue in appeal has been decided by the Coordinate Benches of the Tribunal in number of cases, wherein it has been held that the provisions of section 40(a)(ia) of the Act have no application when there is a short deduction of TDS. 8. In the case of ACIT v. M/s. TV 18 Home shopping Network Ltd., in ITA.Nos. 4725 4726/Mum/2018 dated 19.02.2020 the Coordinate Bench of the Tribunal held as under: - 2. Briefly stated the facts are that during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a)(ia) have no application when there is short deduction of tax observing as under: We have heard the rival submissions and perused the material before us. We find that the Hon ble Kerala High Court in the case of P V S Memorial Hospital(supra), has held that deduction of TDS under wrong provision of law will not save assessee from disallowance u/s. 40(a)(ia)of the Act. However, the Kolkata High Court in the matter of Samir Tekriwal(supra), has held that expenses are not liable to be disallowed u/s.40(a)(ia)on account of short deduction of tax. The Hon ble jurisdictional High Court has not decided the issue. Thus, we are faced with two diagonally opposite views about applicability of the provisions of section 40 (a)(ia)of the Act. We find that the Hon ble Bombay High Court has in the case of Ashok Kumar Parekh (186 IT R212)has dealt with the binding precedence of the High Court judgments.Here,we would also like to reproduce the a portion of the judgment delivered by the Hon ble Bombay High Court in the case of Siemens India Ltd.(156ITR11) and same reads as under : So far as the legal position is concerned, the ITO would be bound by a decision of the Supreme Court as al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not the case of no TDS but the case of less TDS therefore, the disallowance made by the AO is bad in law. The Ld. CIT(A) has relied on the decision of the Hon ble Calcutta High Court rendered in CIT vs S. K. Tekriwal 48 SOT 515 and the decisions of coordinate Bench of the Tribunal in the cases of CIT vs M/s Star Den Media Services pvt .Ltd( ITA No 1413/MUM/2014) and Chandabhoy Jassobhoy vs DCIT 49 SOT 448 (Mumbai ITAT). As pointed out by the Ld. counsel for the assessee this issue is covered by the judgment of the Hon ble Bombay High Court delivered in CIT vs. M/s UTV Entertainment Television Ltd. in Income Tax Appeal (supra) in favour of the assessee. Similarly, the Hon ble Gujarat High Court in CIT vs. Prayas Engineering Ltd., (supra) and the Karnataka High Court in CIT vs. Kishore Rao others (HUF) (supra) have held that in case of shortfall due to any difference of opinion as to the taxability of any item or the nature of payments falling under various TDS provisions, no disallowance can be made by invoking provisions of 40(a)(ia) of the Act. Respectfully following the same, we confirm the stand of first appellate authority in the impugned order. 7. As could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and Assessing Officer has made only an adhoc disallowance without rejecting Books of Accounts which is not proper and justified. 16. We have heard the rival submissions, perused the orders of the authorities below. The issue has been considered by the Ld.CIT(A) with reference to the submissions of the assessee and the averments made by the Assessing Officer in Assessment Order and deleted the disallowance observing as under: - 9.2 I have considered the issue under appeal, carefully. I find that the Ld. Assessing Officer has disallowed the expenditure without any contrary evidences in possession. It is very evident from the assessment order itself that by letter dated 07.03.2014, the Assessee has submitted detailed break-up of the expenses. The Assessing Officer has not demonstrated as to why this commission expenditure is ingenuine and is not allowable. Since the Assessing Officer has not substantiated his reasoning and has not pointed out any defect in the claim of the Appellant, such disallowance of commission expenditure cannot be sustained. The Assessing Officer is therefore, directed to delete the disallowance of commission expenditure of ₹ 13,93,805/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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