2014 (9) TMI 1016

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....he assessee failed to deduct tax on Royalty and Commission. 2. On the facts and in the circumstances of the case and n law, the Ld. CIT(A) erred in deleting the addition u/s. 40(a)(ia) holding that as per the Balance Sheet of 31.03.09 no amount was shown payable on account of royalty and commission expenditure." 3. Facts necessary for disposal of the appeal are set out in brief. During the year under appeal the assessee declared income from royalty of film clippings and film songs to various television channels and others. Assessee has also paid royalty of Rs. 23,33,876/- and commission of Rs. 13,23,705/-. During the course of assessment proceedings assessee was called upon to furnish details of these expenditure and tax deducte....

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....filed and so the ITO failed to appreciate that tax cannot be collected once again by the Department if it is already paid by the payee. It was further reiterated that no expenditure was outstanding or payable as on Balance Sheet date, i.e. 31.03.2009 for which TDS has to be collected and hence section 40(a)(ia) cannot be invoked in the light of the order of the ITAT Special Bench in the case of Merilyn Shipping & Transports. 6. In the light of the decision of the ITAT Special Bench supra the learned CIT(A) observed that the provisions of section 40(a)(ia) applies only to amounts shown as payable on the date of Balance Sheet whereas in the instant case the amount was already paid/credited. He therefore set aside the addition mad by the AO....

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.... rival submissions and perused the material before us. We find that expenses related to professional fees, advertisement and management were debited in P&L Account, that same were paid. Therefore, in our view, no disallowance u/s 40(a)(ia) of the Act should be made. We further find that while deciding the appeal in the case of Janapriya Engineers Syndicate (I.T.T.A. No. 352 of 2014- dt. 24.06.2014) the Hon'ble Andhra Pradesh High Court has clarified the issue of interim stay granted by it in the case of Merilyn Shipping & Transports (supra). We will like to reproduce the relevant part of the said order and same reads as under: "4. We are of the view that until and unless the decision of the Special Bench is upset by this Court,....