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TMI Blog2023 (12) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... re the relevant income has been declared by the payee and tax thereon has been paid by him then no disallowance shall be made in the hands of the payer. This proviso is similar to the second proviso to clause(ia) of s.40(a) which was inserted w.e.f. 1.4.2013. Both these provisos were inserted to remove an anomaly and were therefore curative and declaratory in nature. Hence they had to be given retrospective effect. Fee paid to Formula One Management Ltd. of UK (FOM) - On careful observation of Ld.CIT(A), we noticed that the disallowance was deleted on the ground that the assessment made in FOM it was found that the chargeable sum resulted in loss therefore no withholding was required by the assessee the disallowance was rightly deleted. Grounds of Revenue on this issue are rejected. TDS u/s 194H - Disallowance of bank guarantee Commission - As decided in own case [ 2017 (9) TMI 241 - ITAT DELHI] no tax is required to be deducted on bank guarantee Commission u/s 194H of the Act was accepted. Respectfully following the decision of the Tribunal, we reject the grounds raised by the Revenue on this issue. - Shri Challa Nagendra Prasad, Judicial Member And Shri M Balaganes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of TDS was to the extent of chargeable sum in the case of Formula One World Championship (FOWC) i.e. income determined in the case of FOWC by the AO as attributable sum to PE in India. 3. That the Ld.CIT(A) has erred in law and on facts by deleting the disallowance of Rs. 13,86,02,578/- u/s 40(a)(ia) being the payment made to M/s Formula One Management Ltd.(FOM) by holding that the liability of withholding of TDS was to the extent of chargeable sum in respect of M/s Formula One Management Ltd. (FOM). 2. At the outset, the Ld. Counsel for the assessee submits that in these appeals the first issue was whether the fees paid to M/s Formula One World Championship Ltd. (FOWC) M/s Formula One Management Ltd. (FOM) were liable to be disallowed u/s 40(a) for non-deduction of tax. Ld. Counsel submits that the Assessing Officer (for short AO ) while completing the assessment disallowed the gross fee paid to FOWC as well as FOM and the Ld.CIT(A) held that the disallowance was to be restricted to the chargeable sum in the gross fee paid in terms of the CBDT clarification vide Circular No.3/2015 and, therefore, the Ld.CIT(A) restricted the disallowance in respect of FOWC to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to Formula One World Championship Ltd. to UK without deducting the tax. It is the specific case of the assessee is that no disallowance could be me made on RPC fees since the payee Formula One World Championship Ltd. had already been assessed on relevant income and tax thereon had been paid by Formula One World Championship Ltd. directly. The assessee further contended that the second proviso to Clause 40(a)(ia) of the Act is curative and declaratory, therefore, has retrospective effect. The said contention has been turned down during the appellate proceedings. Apart from reiterating the stand of the assessee further contended that in any case the disallowance should be restricted to the chargeable sum comprised in the gross RPC paid (as assessed in the assessment of FOWC). In support of the above contention, the assessee relied on the CBDT Circular No. 3/2015 dated 12/02/2105 followed by Circular dated 26/10/2016 wherein the CBDT has clarified that only chargeable sum paid is liable to be disallowed u/s 40(a)(ia) of the Act. The CIT(A) is of the opinion that no disallowance could be made in respect of RPC fees for the reason that the relevant income had been declared and asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no order u/s 201 has been passed by the Assessing Officer for determining the TDS liability in case of M/s Jaypee Sports International Limited now M/s Jaiprakash Associates Limited and the chargeable sum worked at by department in the assessment order has became final. 5.5.7 In case of Formula One World Championship ( FOWC ) as it is discussed in forgoing para of this order that order u/s 201 was passed for determining the TDS liability in case of M/s Jaypee Sports International Limited which was subject matter of appeal before the Hon ble ITAT and the Hon ble ITAT has altered the chargeable sum worked out in the order u/s 201 passed by the Assessing Officer and directed to the Assessing Officer to consider chargeable sum figure for the assessment order of Formula One Work Championship ( FOWC ). Based on Hon ble ITAT decision, accepted by the department, the undersigned has also considered chargeable sum in relation to P.E. for profit of withholding over payment made to FOWC in case of appellant in this appeal order itself. From the order passed u/s 143(3), date 21.03.2018 in case of Formula One Management ( FOM ) it is found that the chargeable sum is resulted i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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