TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 1184
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....n the business of printing and publishing of magazines and books and trading in books and CDs. It filed its return of income on 30-10-2005 declaring total loss of Rs. 5,34,230/-. During the course of assessment proceedings the Assessing Officer observed that assessee company has debited an amount of Rs. 32,34,652/- under the head Advertising and Publicity. On verification of the same he observed that an amount of Rs. 15 lakhs has been paid as sponsorship to Shunyo Foundation for maintenance of Nala Park Garden, viz. Osho Teerth Garden where advertising boards of the assessee company are displayed. The Assessing Officer asked the assessee to explain as to why such expenditure should not be disallowed du/s.40(a)(ia) of the Act as no tax has b....
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.... 26. filed by Shunyo Foundation for the F.Y.2004-05 is enclosed herewith for your honour's kind consideration and record." We draw your honour's kind attention to clause nos. B-25 & C-55 of the Memorandum of Association of the company, authorizing the Board of Directors to incur such expenditure. We enclose herewith the copy of the relevant pages of the Memorandum of Association containing the above clauses for your honour's kind consideration and record. Further, the company gets the benefit of displaying every month the Osho Times Magazine (Monthly Issue) and Books that are printed and published by the company." 4. However, the Assessing Officer was not satisfied with the explanation given by the assessee. He observed that the asses....
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....he appellant company informing the Shunyo Foundation of putting up this request before the Board of Directors of the appellant company. From the facts on records, it is seen that the board of directors finally agreed to contribute to the maintenance of the ecological park. Both the Shunyo Foundation and the appellant company propagate the Osho philosophy. It was seen by the AO, that the advertisement board of assessee company was displayed on the nallah park garden i.e. the Osho Teerth Garden. From the submission of the appellant company made before the AO, the AO found that the appellant company gets benefit of displaying, every month, the Osho Times Magazine (Monthly Issue) and Books that are printed and published by the company. On perus....
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..... The Ld. Counsel for the assessee submitted that the Garden is open to the public and there is no charge that the assessee has exclusive access to the garden. Referring to the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Maharashtra State Electricity Distribution Company Ltd. reported in 375 ITR 23 he submitted that the Hon'ble High Court in the said decision has held that the expression "rent" would entail the element of possession. The person using it has some degree of possessory control, at least momentarily, although it cannot entrust the user title to the subject matter of the charge. Even the mere right to use is vested with an element of possessory control over the subject matter. However, in the instant case th....
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....yo Foundation for maintenance of Nala Park Garden/Osho Teerth Garden where advertisement board of the assessee company are displayed. It is the case of the Assessing Officer that the assessee company has been using Nala Park Garden/Osho Teerth Garden belonging to Osho Ashram for displaying Magazines and books published by it for which compensation of Rs. 15 lakhs has been paid through Shunyo Foundation which incurs the same on maintenance of the park. Therefore, the company is required to deduct tax at source u/s.194I of the I.T. Act. Since the assessee failed to do so the Assessing Officer, invoking the provisions of section 40(a)(ia), made addition of Rs. 15 lakhs which has been upheld by the CIT(A). It is the submission of the Ld. Counse....