9911796707
TMI Blog2024 (12) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of these expenditures. Thus, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication - Decided in favour of assessee for statistical purposes. Disallowance u/s 40(a)(ia) - non-deduction of tax u/s 194C on payment made for generator/hire and fuel charges - plea of the assessee that the payment made in respect of fuel charges is in the nature of reimbursement of expenditure on fuel - HELD THAT:- We find merit in the submission of the assessee that no TDS is applicable on fuel charges paid by the assessee as the same was reimbursed on a cost-to-cost basis to J.K. Films Power - the provisions of section 194C cannot apply to the charges paid for fuel as the payment is not in nature envisaged u/s 194C particularly the same is not for the work as defined in Explanation to the section. Accordingly, the AO is directed to delete the disallowance in respect of payment made in respect of fuel charges u/s 40(a)(ia) of the Act. Payment made for generator/attendant hire charges - As per the assessee on generator hire charges no TDS was deducted as it was below the threshold limit provided u/s 194I - on attendant charges TDS at the rate of 1% was dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned order on this issue is set aside - Shri Om Prakash Kant, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Rahul K. Hakani For the Revenue : Shri Virabhadra S. Mahajan, Sr.DR ORDER PER SANDEEP SINGH KARHAIL, J.M. The assessee has filed the present appeal against the impugned order dated 12/02/2024, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [ learned CIT(A) ], for the assessment year 2013-14. 2. In this appeal, the assessee has raised the following grounds: 1. The Learned Commissioner of Income Tax (Appeals) [Ld CIT (A)] erred in law and in facts of the case in upholding the Learned Assessing Officer's (Ld AO's) order of disallowing and adding to the total income, the sum of Rs 32,28,387/- after holding the same as cash expenses disallowable u/s 40A(3) of the Income Tax Act, 1961 (IT Act) although the nature of such payment was advance to cashiers and not the cash expenses. 2. The Ld CIT (A) erred in law and in facts of the case in upholding the AO's action of disallowing and making addition to total income, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse, the assessee submitted that the cash payments appearing in its cash book were made to its employees, who are also cashiers. The payment was made as advance to them for petty expenses to be incurred during shooting at different studios and locations. The assessee further submitted that at the place of shooting, various petty expenses are incurred towards conveyance, tea, coffee, snacks, transportation, repairs, maintenance, etc. It was submitted that from the advance received, the cashiers incur the expenditure as and when required and give account to the accountant for advance received and expenses incurred against the same. By referring to the ledger account, the assessee submitted that the nature of payments is advance for production/production shoots and expenses are debited in respective heads of expenditure incurred. The Assessing Officer ( AO ) vide order dated 15/03/2016 passed under section 143(3) of the Act disagreed with the submissions of the assessee and held that it is seen from the ledger that the assessee has made payment to various parties of more than INR 20,000, which is in violation of the provisions of section 40A(3) of the Act. Accordingly, the AO disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt as an advance in the books of the assessee and as against these advances, when accounts are given the expenditure head is debited and the cashier s account is credited. During the hearing, the learned AR submitted that an individual expense ledger account is also maintained day-wise, wherein the cashier account is reversed. The learned AR also furnished the sample copy of such ledger. Further, the assessee has also placed on record sample invoices/vouchers in respect of the expenditure incurred in cash to show that the expenditure incurred in cash at any time is not more than INR 20,000. It is evident from the record that none of these evidences were examined by the authorities and merely on the basis that the total amount of cash paid to each cashier is more than INR 20,000, the addition was made under section 40A(3) of the Act. Therefore, we are of the considered view that it is relevant to examine the accounting treatment of these expenditures in the books of the assessee and also it is necessary to examine and verify all the ledger accounts in respect of these expenditures. Thus, we deem it appropriate to restore this issue to the file of the AO for de novo adjudication afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have considered the submissions of both sides and perused the material available on record. As per the assessee, J.K. Films Power supplies generator on hire to the assessee as and when required. Further, as per the standard practice, the generator is given on hire at a fixed rate per day/hour basis. Along with the generator, J.K. Films Power also supplied/sold diesel and oil as per the consumption and a separate invoice has been issued in respect of the same. It is the plea of the assessee that in respect of generator hire charges/attendant charges TDS was deducted at source. However, with respect to diesel/fuel purchased from J.K. Films Power, the provisions of TDS are not attracted and therefore TDS was not deducted on the same. In this regard, during the hearing, the learned AR placed reliance upon the ledger account of J.K. Films Power in the books of the assessee, forming part of the paper book from pages 295-297, in order to support the submission that generator/attendant hire charges were paid after deduction of TDS. Further, the assessee has also placed on record the invoices raised by J.K. Films Power, forming part of the paper book from pages 298-321, in respect of gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sary documents, it is found that the TDS as per applicable provisions was deducted, then the AO is directed to delete the disallowance made under section 40(a)(ia) of the Act with respect to the generator hire charges and attendant charges. With the above directions, the impugned order on this issue is set aside and ground no.2 raised in assessee s appeal is allowed for statistical purposes. 12. The issue arising in ground no.3, raised in assessee s appeal, pertains to the disallowance made under section 40(a)(ia) of the Act on account of the non-deduction of tax on payment of professional charges. 13. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the assessment proceedings, it was observed that the assessee made a payment of professional charges to Ms. Annu Pathak which was claimed by the assessee in its profit and loss account. Accordingly, the assessee was asked to furnish a copy of the challan with respect to the TDS deducted. In response, the assessee submitted that the TDS was duly deducted while crediting the professional fees to the accounts of the party. The AO, vide assessment order, disagreed with the submissions of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid payment of professional fees. Accordingly, the addition under section 40(a)(ia) of the Act on account of payment made to Ms. Annu Pathak is deleted. As a result, the impugned order on this issue is set aside and ground no.3 raised in assessee s appeal is allowed. 16. The issue arising in ground no.4, raised in assessee s appeal, pertains to disallowance made under section 40(a)(ia) of the Act on account of the non-deduction of tax on payment for a film set. 17. The brief facts of the case pertaining to this issue, as emanating from the record, are: During the assessment proceedings, from the perusal of the ledger of expenses debited to the profit and loss account, it was observed that the assessee has debited expenses in respect of payment made for a film set. Accordingly, the assessee was asked to produce the copies of challan with respect to TDS deducted if any. In response, the assessee submitted that the assessee purchased a ready-made set from M/s Kathasis Studio Private Limited, which was readily available in the studio and was used by them for some of the serials. It was further submitted that the asset was purchased and the ownership was acquired and therefore there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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