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TMI Blog2015 (12) TMI 1846X X X X Extracts X X X X X X X X Extracts X X X X ..... recipient of income has paid the tax in their respective hands has also been regarded. However, we find that there is an amendment in proviso to Sec. 40(a)(ia) r.w.s. 1st proviso to Sec. 201, wherein, if any payee has paid the taxes by offering / disclosing the said receipt in his / her return of income, then the payer (the assessee herein) should not be treated as assessee in default and no disallowance u/s/. 40(a)(ia) of the Act could operate in that scenario. As relying on Ansal Land mark Township (P) Ltd. [ 2015 (9) TMI 79 - DELHI HIGH COURT ] we deem it fit and appropriate in the interest of justice and fair play to set aside this issue to the file of Assessing Officer to decide the issue afresh in the light of the aforesaid judgment to ensure whether the deductee has paid taxes on their income. Accordingly, we direct the Assessing Officer to verify whether the payees have included the subject mentioned receipts in their respective returns and paid taxes thereon or not. If that is so, then disallowance u/s. 40(a)(ia) of the Act shall not be made in the hands of the assessee. Accordingly, the ground raised by assessee is allowed for statistical purposes. - Shri Mahavir Singh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties honour their commitment and for this purpose the payment from the party/ organizers for the artistes are kept with the co-ordinator i.e. assessee. Hence the role of the assessee is to act as custodian of the money. However, the AO disregarded the claim of assessee and held that such payments are liable for TDS provision as per Sec, 194-J of the Act. Accordingly, AO added an amount of ₹25,91,026/- to the total income of assessee. 4. Aggrieved, assessee preferred appeal before Ld. CIT(A) who upheld the action of AO by observing as under :- 8) Due consideration is given to A/R s submission and A.O s assessment order as well as further clarification provided through remand report. The appellant vacillating stand clearly shows that when on the merit of the case the appellant failed to substantiate he has submitted fresh explanation / grounds for deletion of such addition. It may be mentioned that the facts which are brought on record by the AO and further clarified in the remand report do establish that the amount of ₹ 25,92,026/- was clearly under the purview of section 194J. The appellant has objected to invoking section 194J on the plea that there was no contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re entirely different. 10) I also find that the analysis of Hon ble Supreme Court decision in Coca Cola case can t be applied to the facts and circumstances of Appellant case. It may be mentioned that the judgement of Hon ble Supreme Court is considered Law of the land, however, its applicability is always to the existence of similar facts and circumstances. It is also to be accepted that the judgement delivered by the Hon ble Supreme Court cannot be interpreted and implemented in a manner which goes against the objective of basic provisions of the section. 11) It is in this background that the decision rendered by the Hon ble Supreme Court in the case of Coca Cola (P) Ltd has to be understood and implemented accordingly. In this case it will be against the law to interpret that in each and every case where the deductee has paid the tax, though the onus is on the deductor to deduct the tax, the benefit will be given to the deductor. Such type of interpretation goes against the basic objective of TDS provision which is based on the philosophy PAY AS YOU EARN . It is true that TDS provision is presumptive form of taxation, however, the point and time of collection is integral part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cability of TDS provision was questioned which is unacceptable and thereafter relied on the judgment of Hon'ble Supreme Court in the case of Coca Cola (P) Ltd.,, which is also of no help in view of above stated discussion. The assessee s reliance on other two cases are also misplaced in view of above stated discussion as well as the ratio of such decision are not applicable to the facts and circumstances of the appellant case. In view of the aforesaid discussion the payment of ₹ 25,91,026/- was squarely hit by the TDS provision and non-compliance to such provision has resulted in invoking section 40(a)(ia) of the I.T. Act, 1961. Therefore, the addition of ₹ 25,91,026/- is confirmed on merit. Aggrieved, assessee preferred second appeal before us on the following grounds of appeal. 1. That the CIT(A) totally failed to prove the existence of any contractual relationship between the appellant and the Artists eventually admitted at Para 8 Page 6 of the order and only pre-suppose the existences of some ingredients thereof without invoking the provision of section 133(6) when all the relevant particulars and information were readily available with the Department. The CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act could operate in that scenario. The said proviso though inserted by the Finacne Act, 2012 w.e.f. 01.04.2013 has been held to be retrospective in operation by recent decision of the Hon'ble Delhi High Court in the case of CIT v. Ansal Land mark Township (P) Ltd. reported in (2015) taxmann.com 45 (Del) wherein the question raised before the court and the decision rendered thereon is reproduced herein below for the sake of clarity: Question: Whether the second proviso to Section 40(a)(ia) (inserted by the Finance Act, 2012), which states that TDs shall be deemed to be deducted and paid by a deductor if resident recipient has disclosed the amount in his return of income and paid tax thereon, is retrospective in nature or not? Held: Section 40(a)(ia) was introduced by the Finance (No.2) Act, 2004 to ensure that an expenditure should not be allowed as deduction in the hands of an assessee in a situation where income embedded in such expenditure has remained untaxed due to tax withholding lapses by the assessee. Hence, section 40(a)(ia) is not a penalty provision for tax withholding lapse but it is a provision introduced to compensate any loss to the revenue in cases where ..... 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