TaxTMI 
TaxTMI 
2018 (12) TMI 987
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....aw in upholding disallowance made by the Assessing Officer under section 40(a)(ia) of the Income-tax Act, 1961 ("Act") in respect of payment of hotel accommodation expenses to the tune of Rs. 1,53,09,598. 2. That the CIT(A) erred in facts and in law in holding the appellant to be liable to deduct tax at source under section 194-1 out of payments to hotels instead of section 194-C of the Act invoked by the assessing officer. 3. That the CIT(A) erred on facts and in law in arbitrarily holding that as in the case of the appellant, as per the rate contract, the hotels will provide a certain number of rooms at a specified rate the payments were covered under section 194-1 of the Act and tax was required to be deducted at source....
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.... following the same while upholding the disallowance made by the assessing officer under section 40(a)(ia) of the Act in respect of payments made to hotels allegedly holding that the same constitutes payment of "rent" and was covered under section 194-I of the Act. 8. That the Ld CIT(A) has erred on facts and in law in holding that the appellant's liability to deduct tax at source falls under section 194-1 of the Act without appreciating the fact that contracts with hotels do not guarantee any provision of rooms but such contracts only ensure room rate. 9. Without prejudice, that the CIT(A) erred on facts and in law in upholding estimated disallowance of Rs. 4,77,337 on the basis that in 50% of cases where payment is more ....
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.... respect of payments made to hotel for hiring of rooms. The Ld. CIT(A) noted that in the case of the assessee as per the rate contract hotels will provide certain number of rooms on regular basis. The Ld. CIT(A) noted that as in the case of the assessee as per the rate contract hotels will provide a certain number of rooms at specific rate the issue is covered under the provisions of Section 194I, therefore, TDS provisions are clearly applicable. The addition was accordingly confirmed. 4. The assessee has filed an application for admission of additional evidences as per Rule 29 of Income Tax (Appellate Tribunal) Rules, 1963. The additional evidence are as below : S. No. Particulars Page No. 5 Stop sale communication and....
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....y the A.O. under section 40(a)(ia) of the I.T. Act in respect of payments made as per the rate contract with hotels for providing accommodation/rooms for stay of customers travelling to India, allegedly holding that the assessee failed to deduct tax at source under section 194C of the I.T. Act from the payment which was in the nature of payment for work. 5. The assessee filed an appeal before the Ld. CIT(A) who has confirmed the addition for non-deduction of TDS under section 194I of the I.T. Act. The Ld. CIT(A) uphold the disallowance merely by holding that rate contract agreements entered into by the assessee with the Hotels carried an obligation to provide rooms and therefore, the payments for accommodation is in the nature of rent fo....
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....to and the business carried on by the assessee and the correct factual position, the assessee filed these additional evidences. The assessee relied upon the decision of the Hon'ble Delhi High Court in the case of CIT vs. Text Hundred Pvt. Ltd., 351 ITR 57 in which it was held as under : "13. The aforesaid case law clearly lays down a neat principle of law that discretion lies with the Tribunal to admit additional evidence in the interest of justice once the Tribunal affirms the opinion that doing so would be necessary for proper adjudication of the matter. This can be done even when application is filed by one of the parties to the appeal and it need not to be a suo motto action of the Tribunal. The aforesaid rule is made enabling ....
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.... that the above additional evidences clearly establish the nature of the contract with the Hotels and also establish that there are only rate contracts and do not involve any obligation for providing a room or specified set of rooms. Assessee further claimed that since Ld. CIT(A) misunderstood the Circulars issued by the CBDT, therefore, these additional evidences shall have to be considered in order to decide the issue whether provisions of Section 194I would apply in the facts and circumstances of the case. The Hon'ble Supreme Court in the case of Tekram 262 CTR 118 and Hon'ble Punjab & Haryana High Court in the case of Mukta Metal Works 336 ITR 555 admitted additional evidences being relevant and required to be looked into for deciding t....