2018 (5) TMI 340

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....nd heard together and a consolidated order is being passed for the sake of convenience and brevity. 2. First, we may take-up the appeal and cross objection pertaining to Assessment Year 2011-12 wherein the respective Grounds of appeal raised read as under :- ITA No. 2793/Mum/2016 (Revenue's appeal) 1) On the facts and circumstances of the case and in law, whether the Ld. CIT(A) was justified in directing to delete the disallowance u/s. 40(a)(ia) rws 194J placing reliance on the decision of ITAT, Mumbai in the case of Cinetek Telefilms Pvt.Ltd. in ITA No.7834/M/2010 wherein further inter-alia reliance had been placed by the ITAT on the judgment of the Calcutta High Court in CIT Vs S.K.Tekriwal [2014] 46 taxmann.com 444 (Calcut....

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....lication, more so when the contract of the Assessee is to provide satellite services. 2. The Commissioner (Appeals) failed to take into consideration that sec.194C defines the word 'work' which includes broadcasting and telecasting and production of programmes for such broadcasting or telecasting and therefore, the nature of the business of the Assessee company of providing Space Segment Services for up-linking and Content Distribution and Aggregation Services for down-linking of international channels would be the 'work' within the meaning of sec. 194C of the Act. 3. The Commissioner (Appeals) failed to consider the contention of the Assessee company that provisions of sec. 194C are applicable in its case ....

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....ource inasmuch assessee has deducted tax at source @ 2% in terms of Sec. 194C whereas the Assessing Officer required it to be deducted @ 10% in terms of 194J of the Act. As per the CIT(A), mere short-deduction of tax at source would not bring the corresponding expenditure within the disallowance envisaged u/s 40(a)(ia) of the Act and for this, he has relied upon the decision of the Mumbai Bench of the Tribunal in the case of Cinetek Telefilms P. Ltd., ITA No. 7834/Mum/2010 dated 07.06.2013. The CIT(A) also noted that in the assessee's own case for Assessment Year 2010-11, a similar issue had arisen and the CIT(A) had deleted the disallowance. Following the aforesaid precedent, CIT(A) directed the Assessing Officer to delete the disallowance....

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....s per the Hon'ble High Court, where tax has been deducted by the assessee, even under a bona fide wrong impression, under wrong provisions of the TDS, the disallowance envisaged u/s 40(a)(ia) of the Act is not triggered. The said decision squarely covers the controversy before us and, in view of the precedents noted above, order of CIT(A) is hereby affirmed and accordingly, Revenue fails in its appeal. 6. Insofar as the assessee's cross objection is concerned, the grievance is that CIT(A) has not adjudicated on merits the plea of the assessee that tax was rightly deducted by assessee u/s 194C of the Act and that invoking of Sec. 194J of the Act by the Assessing Officer was not correct. 7. Notably, CIT(A) proceeded to set-aside the....