TaxTMI 
TaxTMI 
2017 (2) TMI 599
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.... (a)(ia) of the IT Act 1961 was not called for and hence the same be reversed. 4. For that in the facts and circumstances of the case the disallowance of Rs. 1,13,700/- on account of Instrument Hire Charges by invoking the provisions u/s 40(a)(ia) of the IT Act 1961 was not called for and hence the same be reversed. 5. For that in the facts and circumstances of the case the disallowance of Rs. 1,06,780/- on account of Artist Expenses by invoking the provisions u/s 40 (a)(ia) of the IT Act 1961 was not called for and hence the same be reversed. 6. For that in the facts and circumstances of the case the disallowance of Rs. 29,700/- on account of Assistant Fees by invoking the provisions u/s 40 (a)(ia) of the IT Act 1961 was not called for and hence the same be reversed. 7. The appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963. 8. For that the interest computed u/s 234A/B/C/D of the IT Act 1961 is over charged and wrongly calculated and or is not applicable to the assessee case it be directed to re-compute the interest as per law. 9. The appellant craves lea....
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....art of the letter dt. 11.02.2014 is reproduced below. The above mentioned appeal has been transferred from the Office of the Commissioner of Income Tax (Appeals)-XXXVI, Kolkata to the undersigned. The above mentioned appeal was fixed for hearing on 01.03.2012, 13.04.2012 and 11.01.2013 but non appeared. On all the occasions the A/R of the appellant, Shri Miraj D. Saha filed adjournment and it was considered accordingly. The case was fixed for hearing on 05.02.2014 at 10.30AM, but none appeared before the undersigned either personally or through an Authorised Representative to defend the appeal above. The case is fixed for hearing on 28.02.2014 at 10.30 AM and a fresh notice for hearing is also issued. This is your last opportunity, if you do not wish to avail yourself of this last opportunity of being heard in person or through authorized representative your appeal is liable to be dismissed." 3.2 The appellant did not comply. However, even after the repeated non-compliance, notices of hearing were issued on 14.11.2014 and 04.01.2016. But the appellant has not complied. 5. Ground no-3 is raised challenging the addition made on account of studio hire charges u/se....
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....tudios and musical instruments. Further the assesse submitted that the studios would charge the hire charges for using the studios setup on hourly basis and provides their studios room with furniture and equipment on rent to the music directors and pleaded the question of TDS deduction under section 194C does not arise. We find force in the submissions of the Ld.AR in this regard. The impugned addition as made by the AO is admittedly below the prescribed monetary limit as required u/section 194I of the Act, therefore, we hold that the addition made for violation of Section 194C is not maintainable and as such it is deleted, accordingly, ground no-3 is allowed. 8. Ground no-4 involving the payment to the tune of Rs. 2,31,736/- under the head Instrument Hire Charges which includes payments of Rs. 1,13,700/- paid to three parties of Rs. 22,400/- to Mr. Netai Lal Chakraborthy, Rs. 35,200/- to Mr. Debaditya Chowdhury and Rs. 31,400/- to Mr.Gaurav Chatterjee. In explanation to an amount of Rs. 1,13,700/- on account of instrument Hire Charges assessee submitted through reply on 05- 12-2008 that it did not pay more than Rs. 1,20,000/- to any single party as the studio provides their stu....
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.... of Section 194(C) and disallowed of Rs. 1,13,700/- on account of Instrument Hire Charges. The CIT-A dismissed the appeal of the Assessee for non- appearance. 10. Before us, the Ld.AR contends that the assessee is an individual and the provisions of section 194C as it was relevant to the AY 2006-07 i.e. under consideration and it is not applicable to the facts and circumstances of the present case concerning the instrument hire charges and argued that the assessee is not liable to deduct tax against the payment made towards instrument hire charges to an extent of Rs. 1,13,700. The Ld.AR argued that due to the amendment of section 194C by Finance Act 2007, wherein an individual was made liable to deduct tax came into force 1-4-2007 relevant to made applicable for the AY 2007-08 and relied on the order of Co- ordinate Bench of Kolkata Tribunal in the case of Sri Pradip Saha in ITA No.1765/Kol/2011 for the AY 2006-07 and referred to para no-4 of the said order. 11. In reply, the ld.DR submits that there was no representation on behalf of assessee before the CIT-A and referred to para no-3 of the order of the CIT-A. He also argued that the CIT-A has offered many opportunities to ....
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....n 194C(1) & (2) as exist in assessment year 2006-07 & 2007-08 reads as under :- "(1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and-- (a) the Central Government or any State Government ; or (b) any local authority ; or (c) any corporation established by or under a Central, State or Provincial Act ; or (d) any company, or (e) any co-operative society ; or (f) any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both ; or (g) any society registered under the Societies Registration Act, 1860 (21 of 1860), or under any law corresponding to that Act in force in any part of India ; or (h) any trust ; or (i) any University established or incorporated by or under a Central, State or Provincial Act and an in....
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....07 wherein it is proposed to amend Sub-Section (1) in Section 194C so as to include payments made by any individual or Hindu Undivided Family whose total sales / gross receipts or turnover from the business or profession carried on by him exceed monetary limit specified under clause (a) or clause (b) or Section 44AB during the financial year or immediately preceding financial year in which such sum is credited or paid to the account of the Contractor. This amendment takes effect from 1st day of June, 2007 and is applicable for and from assessment year 2008-09. In Section 194C(1) with effect from 01.06.2007, by the Finance Act, 2007, clause as inserted, reads as under :- "(k) any individual or a Hindu Undivided Family, whose total sales, gross receipts or turnover from the business or profession carried on by him exceed the monetary limits specified under clause (a) or clause (b) of Section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor, shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or d....
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....ractors. 54.4 There would be genuine difficulties if individuals or HUFs with small business turnovers or gross receipts of profession are required to deduct tax at source. An exception in such cases would be justified. Similarly the contracts awarded by an individual or a member of HUF of HUF exclusively for personal purposes merit exclusion. 54.5 Accordingly, the Finance Act, 2007, has substituted the said sub-section (1) to include in its ambit such individual or a Hindu undivided whose total sales, gross receipts or turnover from the business or profession carried on exceed the monetary limits specified under clause (a) or clause (b) of section 44AB during the financial year immediately preceding financial year in which sum is credited or paid to the account of the contractor. This amendment shall not apply in respect of payments made to a contractor by any individual or a member of a Hindu undivided family exclusively for their personal purposes. 54.6 Applicability - This amendment will take effect from the 1st day of June, 2007." 8. In view of the above clear provisions of Section 194(1) as existing in assessment years 2006-07 & 2007-08, i.....
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....ation U/Section 194C of the Act by invoking Section 40(a)(ia) of the Act. During the assessment proceedings, the AO found the payments to the tune of Rs. 3,55,472/- under the head Artist Expenses which includes payments of Rs. 1,06,780/- (Rs. 35,1801/- to Mr. Lalan Das, Rs. 40,300/- to Mrs. Mahua Das and Rs. 31,3001/- to Mrs. Lina Bhattacharya ) made without deducting any tax at source. In explanation the assessee stated vide his reply that he could not concentrate in his profession during the period due to some personal problems and not satisfied with the reply of the assessee the payment of Rs. 1,06,780/- under the head Artist Expenses was disallowed under the provisions of u/s. 40(a)(ia) of the Act and added to the total income. As discussed above, the CIT-A dismissed the appeal of the Assessee for non-appearance. 15. Before us, the Ld.AR submits that the direction may be ordered to AO to examine, whether the said payments made to Artists as found by the AO declared as their income in their returns or not and placed reliance on the decision of Hon'ble High Court of Delhi in the case of Ansal Landmark Township (P) Ltd reported in 362 ITR 241(Del) and the Ld.DR reported no obje....
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....e first proviso to Section 201(1). The insertion of the second proviso to Section 40(a) (ia) also requires to be viewed in the same manner. This again is a proviso intended to benefit the Assessee. The effect of the legal fiction created thereby is to treat the Assessee as a person not in default of deducting tax at source under certain contingencies. 12. Relevant to the case in hand, what is common to both the provisos to Section 40 (a) (ia) and Section 210 (1) of the Act is that the as long as the payee/resident (which in this case is ALIP) has filed its return of income disclosing the payment received by and in which the income earned by it is embedded and has also paid tax on such income, the Assessee would not be treated as a person in default. As far as the present case is concerned, it is not disputed by the Revenue that the payee has filed returns and offered the sum received to tax. 13. Turning to the decision of the Agra Bench of ITAT in Rajiv Kumar Agarwal v. ACIT (supra ) , the Court finds that it has undertaken a thorough analysis of the second proviso to Section 40 (a)(ia) of the Act and also sought to explain the rationale behind its insertion. In p....
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....slature has been compassionate enough to cure these shortcomings of provision, and thus obviate the unintended hardships, such an amendment in law, in view of the well settled legal position to the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced. In view of these discussions, as also for the detailed reasons set out earlier, we cannot subscribe to the view that it could have been an "intended consequence" to punish the assessees for non deduction of tax at source by declining the deduction in respect of related payments, even when the corresponding income is duly brought to tax. That will be going much beyond the obvious intention of the section. Accordingly, we hold that the insertion of second proviso to Section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1st April, 2005, being the date from which sub clause (ia) of section 40(a) was inserted by the Finance (No. 2) Act, 2004." 16. keeping in vie....