G. Krishnamurthy Vs DCIT (ITAT Chennai)
ITAT Chennai held that disallowance u/s 40(a)(ia) of the Income Tax Act for non-deduction of TDS is justified as TDS is not deducted and assessee has failed to file any evidence that receipts have declared the amount in their return of income.
Facts- The assessee has preferred the present appeal contesting that CIT(A) erred in confirming the action of the AO in disallowing the claim of deduction of expenses by invoking the provisions of section 40(a)(ia) of the Act, for non-deduction of TDS on payments made disallowance of amount of interest of Rs.4,50,000/-; professional charges at Rs.42,30,000/-, publicity at Rs.17,06,427/-; and another amount of interest expenditure of Rs.60,821/- thereby total disallowance made at Rs.64,47,248/-.
Conclusion- Held that the assessee has not deducted TDS and as the assessee failed to file any evidence in regard to his claim that the recipients have declared in their returns of income the alleged receipts, we are confirming the order of CIT(A) and dismiss this issue of assessee’s appeal.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-14, Chennai in ITA No.08/CIT(A)-14/2012-13 dated 13.11.2019. The assessment was framed by the DCIT, Media Circle-I, Chennai for the assessment year 2009-10 u/s.143(3) of the Income Tax Act, 1961 (hereinafter the ‘Act’), vide order dated 26.12.2011.
2. At the outset, it is noted that the assessee filed this appeal on 20.01.2020 and initially one or another advocate appeared without vakalath till 10.03.2022. After that the matter was fixed for hearing on various occasions 13 times and none present on behalf of assessee despite service of notice through RPAD. It is to be pointed out that the appeal fixation is also displayed in the official website of ITAT i.e., itat.gov.in. We feel that the assessee seems not interested in prosecuting the appeal. Hence, we decided to decide the appeal based on material available on record on merits, after hearing ld. Senior DR.
3. The first issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of AO in reopening the assessment. We have heard ld. Senior DR and gone through facts and circumstances of the case. We noted that the assessment is framed u/s.143(3) of the Act and no reopening is done and hence, this ground is without any basis and hence, dismissed.
4. The second issue in this appeal of assessee is as regards to the order of CIT(A) confirming the disallowance of loss from ‘Thee’ movie amounting to Rs.8,78,539/-. The AO applied Rule 9B of the Income Trax Rules. and asked the assessee to file censor certificate and proof of release of said film. The assessee before AO orally stated that the said film was released in February, 2009 and therefore consented to apply Rule 9B of the Income Tax Rules which worked out at Rs.8,78,539/-. Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) confirmed the action of the AO by observing in para 6 as under:-
“6. The assessee has also submitted proof that an amount of Rs.5,73,902/-had been offered to taxation in AY 2010-11 from the distribution of the same movie and that the disallowance should be restricted to Rs.3,04,637/-only. The submission of the assessee is considered. The assessee has clearly violated the provisions of Rule 9B wherein the expenditure incurred towards any movie is restricted only to the extent of income admitted in a case where the film release happens in the last three months of the financial year. Considering the requirement of enforcing the provisions of law in the strict and limited understanding, the plea of the assessee cannot be accepted. The disallowance of Rs.8,78,539/- for AY 2009-10 is upheld.
Aggrieved now, assessee is in appeal before us.
5. We have heard ld. Senior DR and gone through facts and circumstances of the case. We noted that there is no material available that the assessee has followed the provisions of Rule 9B of the Income Tax Rules, wherein expenditure incurred towards distribution of any movie restricted only to the extent of income admitted and in the absence of the same, we have no alternative except to confirm the order of CIT(A). Hence, this issue of assessee’s appeal is dismissed.
6. The next issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in disallowing the claim of deduction of expenses by invoking the provisions of section 40(a)(ia) of the Act, for non-deduction of TDS on various items. The following are the items:-
