Case Law Details
DCIT Vs. Sri Rikhab Chand Jain (ITAT Kolkata)
Payment for Purchase of Advertisement Materials would not attract TDS Under Section 194C of Income Tax Act, 1961
Expenses were claimed, by the assessee for poster, calendar, flex board, umbrella, air bag, hawker bags, cloth banner, pad, jute bags and pens etc. The AO had treated these payments as job work charges to various persons treated as contractors by the AO whereas the assessee claimed these expense as purchase price for procurement of various materials. We note that the assessee had claimed that the expenditure was not consideration for works contract but were for purchase of various materials to be used in advertising activity. The same issue on almost identical facts came up in assessment year 2009-10 and 2010-11 also, where the CIT(A) used to delete said additions on identical facts. The CIT(A) in these assessment years had decided the issue in favour of the assessee and the department did not file the appeal. Following the principle of consistency, we are of the view that in the assessment year under consideration the department can not take a different view. We note that the CIT(A) has been consistently accepting that no dis allowance should be made under section 40(a)(ia) of the Act, therefore, we uphold the order of the ld. CIT(A) following the Rule of consistency. For that we rely on the order of the Hon’ble Supreme Court in Radhasoami Satsang vs. CIT 193 ITR 321 (SC).
We also note that the said issue of the assessee is fully covered by the judgment of the coordinate Bench in assessee`s own case in ITA No. 907/Kol/2013, A.Y.2009- 10, wherein it was held that the assessee had made payments for purchase of material and had admittedly not supplied the materials to the job worker and hence the same would not fall under the definition of ‘work’ as per section 194C of the Act, hence there is no violation of section 194C warranting any dis allowance u/s 40(a) (ia) of the Act.
No Disallowance under Section 14A read with Rule 8D if investments are business expediency and strategic investments
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