AI Drafter 
TaxTMI 
TaxTMI 
2005 (5) TMI 551
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....ree appeals, the revenue has raised sole common ground, which is as under : "On the facts and in the circumstances of the case and in law, ld. CIT(A)-XXV, Mumbai erred in holding that payments made by the advertising agents to the hoarding owners fall under the provisions of section 194C of the Income-tax Act, 1961 and not under the provisions of section 194-I as held by the Assessing Officer." 4. The ld. DR has contended that the crucial issue involved in all these three appeals is as to whether in the facts of the case pertaining to assessee-company the provision of section 194C is applicable or the provision of section 194-I in respect of making of TDS from the payments made by the assessee. The ld. DR has contended that the Assessing Officer has applied the provision of section 194-I treating the payment of charges made by assessee, the advertiser, to the payee as rent and holding the assessee liable for making TDS from the said payment treating the same as rent payment under section 194-I as against the plea of assessee that the said payment is not rent payment but is a sort of payment made to contractor/sub-contractor falling under section 194C. He has contended t....
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....he appellant had deducted tax at source under section 194C @ 1% and deposited the same with the Government as required by the Act. The ld. ITO however has held that tax ought to have been deducted at source @ 20% under section 194-I instead of @ 1% under section 194C. The ld. ITO took the view that (page 6 of his order) 'The advertisement contract liable for TDS at 1% is in respect of advertisement in newspapers, periodicals, radio, television, etc. The amounts paid by the assessee to hoarding site owners cannot be treated as advertisement payments made.' The ld. ITO failed to appreciate that all types of advertisement contracts including advertisement in respect of hoardings would clearly fall within the purview of section 194C of the Income-tax Act. It is the appellant's contention that there is absolutely no justification in excluding advertisement on hoardings from the scope of section 194C and restricting the applicability of section 194C merely to advertisement in newspapers, periodicals, radio, television, etc. There is nothing in section 194C to even remotely suggest that its applicability is confined only to advertisement in newspapers, periodicals, radio, television, etc.....
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....uestion of charging interest under section 201(1A) does not arise. Further interest under section 201(1A) cannot be levied on the appellant especially in view of the fact that the payees (recipients of the income) have already paid the taxes on time (& in case of delay, if any, the interest for the delay has been paid by the payees concerned). Hence, interest would not be payable by the appellant under section 201(1A). In this regard, reliance is placed on the decisions in the case of ITO v. Sood Enterprises [1992] 41 ITD 234 (Delhi). Munak Investment (P.) Ltd. v. ITO [1995] 55 ITD 429 (Chd.) and Viswapriya Financial Services & Securities Ltd. v. ITO [1997] 60 ITD 401 (Mad.)." 6. As against the contentions of ld. DR, the ld AR of assessee has contended that in the instant case section 194-I will not apply. Referring to the above-mentioned Board's Circular No. 715 she has contended that the Circular cannot override law. Referring to Explanation (i) to section 194-I, which defines 'rent' she has contended that 'hoarding site' does not fall within 'any land or any building', and in, turn, the payment made by assessee to the holders/owners of hoarding sites for taking from them the ....
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.... impugned appellate order. After considering all the facts and circumstances of the case as also the elaborate discussion made by ld. CIT(A), we find that the persons involved in the process of advertisement on hoardings may be categorized as under : I. Landlords - i.e., the owners/holders of buildings or lands on which the hoardings are erected.These landlords may either themselves put up/erect the hoardings on their building/land or may let out, the space in their building/land to others to put up/erect hoardings; and in the latter situation the building/land belongs to the landlord- lessor while the hoarding belong to the lessee, who has taken the space on lease on payment of rent for the space taken on lease, to erect hoarding thereon. II. Advertising agents being hoarding holders - These advertising agents are the owners of hoarding sites. They may either themselves display the advertisements on their hoarding sites or they may give the right of display on their hoarding rights to others on payment of charges for a specific period may be a month or so or otherwise. III. Advertising agents having display rights - These are the persons who do not hold/....