Case Law Details
Mehra Eyetech Pvt. Ltd. Vs Add. CIT (ITAT Mumbai)
The issue under consideration is whether the CIT(A) was justified in confirming the disallowance made u/s. 40(a)(ia) on account of advertisement expenses paid to News Paper Agencies, incurred without deduction of tax at source?
ITAT states that there is absolutely no dispute that the said payment was made towards advertisement charges to Harsha Agencies which is a franchisee of ‘The Hindu’. On bare reading of provisions of Section 194C of the Act, they find that any person responsible for paying any sum to any resident for carrying out any work in pursuance of a contract shall deduct tax at source thereon. Explanation to Section 194C of the Act defines the term ‘work’ to include ‘advertising’. Hence, the very fact that assessee had given the advertisement material to M/s. Harsha Agencies, constitutes a contract entered into by assessee and Harsha Agencies. Hence, all the ingredients of Section 194C of the Act get squarely attracted in the instant case. Hence, ITAT hold that assessee is indeed liable for deduction of tax at source. Accordingly, AO is justified in making disallowance u/s.40(a)(ia) of the Act for the said sum for violation of TDS provisions.
Hence, Appeal filed by the assessee is dismissed.
FULL TEXT OF THE ITAT JUDGEMENT
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