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Income Tax Appellate Tribunal, KOLKATA BENCH (C
Before: Shri P.M. Jagtap & Shri S.S. Viswanethra Ravi]
order
: January 25, 2019 ORDER
Per P.M. Jagtap, Vice President
This appeal filed by the assessee is directed against the order of Ld. CIT(A) – XXIV, Kolkata dated 15.10.2014 whereby he confirmed the disallowance of Rs. 63,58,503/- made by the A.O. u/s 40(a)(ia) of the Income tax Act, 1961.
The assessee in the present case is an individual who is engaged in the business of production of telefilm. The return of income for the year under consideration was filed by him on 29.03.2012 declaring a total income of Rs. 9,76,789/-. During the course of assessment proceedings, it was noticed by the A.O. that the following expenditure was incurred by the assessee during the year under consideration: “i. Artist remuneration Rs. 34,69,225/- ii. Studio hire charges Rs. 13,20,000/- iii. Equipment hire charges Rs. 8,19,000/- Rs. 7,50,278/-‘’ iv. Interest on loan 2 Assessment Year: 2011-12 DEEPAK BAJAJ 3. According to the A.O., the assessee was required to deduct tax at source from the payments made against the expenditure incurred on artist remuneration, studio hire charges, equipment hire charges and inter on loan u/s 194J, 194I and 194A of the Act respectively. Since the assessee had failed to comply with the said requirement, the A.O. invoked the provisions of section 40(a)(ia) and made a total disallowance of Rs. 63,58,503/- on account of artist remuneration, studio hire charges, equipment hire charges and interest on loan in the assessment completed u/s 143(3) vide an order dated 31.12.2013. On appeal, the Ld. CIT(A) confirmed the said disallowance made by the A.O. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal on the following grounds: “a. That the Commissioner of Income-tax (Appeals) was wrong in confirming the disallowance made by the Assessing Officer by applying the provisions of section 40(a)(ia) in respect of the following expenses for non-deduction of Taxes at source: i. Artist remuneration Rs. 34,69,225/- ii. Studio hire charges Rs. 13,20,000/- iii. Equipment hire charges Rs. 8,19,000/- iv. Interest on loan Rs. 7,50,278/- Rs. 63,58,503/- b. That without prejudice to the contention raised in Ground No. (1) above, the Commissioner of Income-tax (Appeals) erred in not appreciating the fact that in relation to the following expenses for which the payments had already been made during the year itself, there could not have been any disallowance u/s 40(a)(ia) and thus he erred in confirming the said disallowances made u/s 409a)(ia): i. Artist remuneration Rs. 34,69,225/- ii. Studio hire charges Rs. 13,20,000/- iii. Equipment hire charges Rs. 8,19,000/- Rs. 56,08,225/- c. That without prejudice to the contentions raised in Grounds Nos. (1) and (2) above, the Commissioner of Income-tax (Appeals) failed to 3 Assessment Year: 2011-12 DEEPAK BAJAJ appreciate that in view of the fact that since the concerned payees had already taken into account the amounts paid by the appellant in their respective returns of income and paid the due taxes thereon, the appellant could not be deemed to be an assessee in default and thus he erred in confirming the disallowances made u/s 40(a)(ia).”
We have heard both the sides and also perused the relevant material available on record. The limited contention raised by the learned counsel for the assessee is that the entire amount of Rs. 63,58,503/- paid by the assessee to the concerned parties on account of artist remuneration, studio hire charges, equipment hire charges and interest on loan having been already offered to tax by the concerned parties, the assessee cannot be treated as the assessee in default for non-deduction of tax at source on the said payment and the question of making disallowance u/s 40(a)(ia) as held by the Hon’ble Supreme Court in the case of M/s. Hindustan Coca Cola Beverage Pvt. Ltd. vs CIT reported in 293 ITR 226. He has submitted that the Assessing Officer may verify this claim of the assessee and allow appropriate relief to the assessee by following the decision of Hon’ble Supreme Court in the case of M/s. Hindustan Coca Cola Beverage Pvt. Ltd. (supra). The learned DR has not raised any objection for sending the matter to the Assessing Officer for such verification. We accordingly set aside the impugned order passed by the Ld. CIT(A) on this issue and restore the matter to the file of the A.O. for the limited purpose of verifying the claim of the assessee that the concerned parties having already paid tax on the amounts in question paid by the assessee on account of artist remuneration, studio hire charges, equipment hire charges and interest on loan and to allow appropriate relief to the assessee on such verification,
In the result, the appeal of the assessee is treated as allowed for statistical purpose. Order Pronounced in the Open Court on 25th January, 2019.