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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI D.T. GARASIA & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the revenue. The relevant assessment year is 2012-13. The appeal is directed against the order against the order of the Commissioner of Income Tax (Appeals)- 59, Mumbai and arises out of order u/s 201(1) and 201(1A) of the Income Tax Act, 1961 (the Act).
The grounds of appeal filed by the revenue read as under:
i. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the additions made u/s. 201(1) & 201(1A) by holding that the payments made by the assessee for hoarding / display rights fall within the purview of section 194C and not section 194I, without considering the entire set of facts in totality read with the amended definition of rent u/s 194I. ii. The Ld. CIT(A) has erred in law and on facts by treating that the payment made as advertisement on hoarding fall within the purview of section 194C and is not in the nature of rent within the meaning of section 194I of the I.T. Act, without appreciating the fact that the definition of rent u/s. 194I has been amended w.e.f. 13.07.2006 and as applicable in the case of the assessee which says that any person responsible for making any payment under any other agreement or arrangement for the use to (either separately or together any) a( land or B) building ...... h) fittings ..... whether or not any or all of the above are owned by the payee.
The Assessing Officer (A.O.) observed that during the financial year 2011-12, the assessee had paid Rs. 61,97,64,111/- for advertisement on hoarding on which tax was deducted at source @ 2% u/s 194C of the Act. The A.O. was of the view that since the payee concerns were found to have sublet the hoarding sites to the assessee-company, it was required to deduct tax at source @ 10% u/s 194I of the Act. The A.O. thus concluded that Rs. 5,33,08,941/- had been deducted short for which the assessee was held to be in default u/s 201(1) of the Act. Further the A.O. held the assessee to be liable for interest u/s 201(1A) for 36 months which worked out to Rs. 1,91,91,218/-. Thus the total tax liability worked out by the A.O. was Rs. 7,25,00,159/-.
Aggrieved by the order of the A.O., the assessee filed an appeal before the learned CIT(A). We find that the learned CIT(A) followed the order of her predecessor-in-office and also the order of the Tribunal in the case of M/s. Madisons Communications Pvt. Ltd., & 4992/Mum/2013 dated 29/10/2014 and held that the assessee was liable to deduct tax on payment made for advertising and hoarding u/s 194C of the Act. Thus the learned CIT(A) deleted the demand so raised u/s 201(1) and interest u/s 201(1A) of the Act.
Before us, the learned DR supports on the order of the A.O. On the other hand the learned counsel of the assessee relies on the order of the learned CIT(A) and also the order of the Tribunal in assessee’s own for the A.Y. 2010-11 [7049/Mum/2012] and A.Y. 2011-12 [7050/Mum/2012].
We have heard the rival submissions and perused the relevant material on record. We find that a similar issue arose before the Co- ordinate Bench as mentioned above. The Tribunal referred to the CBDT Circular No. 715 dated 08.08.1995 and held as under:
“From the above clarificatory circular issued by CBDT which clarifies that the nature of advertising contract is for contractual payments and the provisions of section 194C of the Act would be applicable, is enough to explain that the assessee’s payments made to various parties for the purpose of display of the advertisements of assessee’s client do not fall in the category of rent and hence assessee was only required to deduct TDS u/s 194C of the Act. This has also support of order of ITAT Co- ordinate Bench of Mumbai in the case of ITO (TDS) Vs. Roshan Publicity (P) Ltd. (2005) 4 SOT 105 (Mum) wherein exactly identical view was taken. In view of the above facts and circumstances, we are of the view that the CIT(A) has rightly held that the assessee is liable to deduct TDS u/s 194C of the Act in respect of the payments in dispute. Accordingly this issue of Revenue’s appeals of both the years is dismissed.” 6.1 Facts being similar, we follow the order of the Co-ordinate Bench and uphold the order passed by the learned CIT(A).
In the result, the appeal is dismissed.
Order pronounced in the open Court on 12/05/2017